Posted this at the 'fest but feel it better fits here

Josh (PA) · 03-09-2005, 10:13 PM

I still lurk here a lot, and felt this post I made at the 'fest better fits the mood of this board. I too waffle on my next car purchase and put way too much energy into a decision that's 3 years away. One thing I've been thinking about lately is how worthless the CPO program is. Am I missing something on it, or are my thoughts from this post pretty much spot on? For the record, I flat out love my e36 m3, and can't find anything new or used that measures up. I've put 50k miles on it in just over 2 years (80k total) with no problems, but kids are in the future and space will become an issue.

Bimmmerfest Post Below:

This is something I've been thinking about for a couple of days now. The idea started with one of my normal fantasies about what car I'd buy next (currently scheduled for 2008). I narrowed it down to a new e90 m3 4 door, or a used e39 M5. Assuming a 4 year old m5 is 20k less than the m3, the m5 would be my choice hands down. But, I've been debating with myself the idea of new vs used cars. On top of that, if I bought used whether there's any true advantage to CPO/dealer cars over private sales. I can understand and justify wanting a new car for the free maintenance/full warranty and ability to order a car to your exact specifications at the expense of the huge early depreciation curve, higher price, weaker negotiation position, etc. Where I'm really having trouble is justifying why I would ever buy a used car off a dealer lot (which I've done 3 times in the past).

Looking at Edmunds it seems like, on average, used cars at dealerships are ~3-5% higher than used cars at private sale. For what? What happens to a used car on a dealer lot that justifies say ~$1500 extra over a car an individual is selling. On top of that CPO cars are another ~$3k to $4k. I see no real value in the CPO warranty or inspection. I've owned 3 CPO cars and the only thing that's ever broken and been covered (at the $50 deductible) was a leaky differential seal on my wife's e46.

In the past I bought into the "CPO inspection" and the fact that dealers wouldn't risk soiling their reputation and brand equity pushing garbage. Now I've found a good independent mechanic who I trust and I'd have him do a pre-sale inspection, which I'm certain would put me at a better purchase knowledge base than before.

So am I missing something? Why are CPO used cars so hugely popular in the industry? What benefit is there to buying a used car from a dealership over finding one on your own?

ARCHER · 03-09-2005, 10:34 PM

Given that I am planted firmly in the performance niche market, as suspect you are, a CPO car carries precious-little weight with me anymore. There are plenty of nut-job owners out there (and TD can back me on this - cough *Scott* cough) who have been pampering their low-miles garage queens, to a disturbing degree, since the day they left the showroom.

They are out there. And when you find one, it is quite obvious. You just have to be patient.

zach · 03-09-2005, 10:36 PM

The only reason I bought my car CPO was for the extra warranty. It was leftover CPO though, as I bought it from a private owner.

bren · 03-09-2005, 10:36 PM

Quote:

Originally Posted by Josh (PA)

So am I missing something? Why are CPO used cars so hugely popular in the industry? What benefit is there to buying a used car from a dealership over finding one on your own?

Most of the population knows nothing about cars. They get a warm fuzzy feeling buying from a known entity that they can return to and bitch about every little thing that might be wrong or will go wrong with the car.

*clyde* · 03-09-2005, 10:45 PM

Quote:

Originally Posted by Josh (PA)

So am I missing something? Why are CPO used cars so hugely popular in the industry? What benefit is there to buying a used car from a dealership over finding one on your own?

There are two main benefits to buying used from a dealer for most people. Financing ease/options and peace of mind (real or imagined). CPO programs enhance the peace of mind factor (again, real or imagined).

I'm not sure that there is a real benefit to a CPO program over a stand alone factory backed extended service contract. Over the years, my family has gone through many new and used cars. Most of the new and late model cars we've gotten with extended service contracts. They've been wastes of money for most of the cars. But there were a couple problem vehicles that had enough work to more than pay for all of the ESPs we've bought over time.

Pinecone · 03-10-2005, 03:56 AM

WHo else has factory backed maintenance agreements avaialbe?

D-C has factory extended warranties. And Ihave had those, and they are very nice to have to cover the various things that go wrong after the normal warranty expires.

Now that BMW has both available, I will definately get the extended maintenance agreement onteh M3 (the Inspections can be worth it), even though I do my own brakes and other wear items.

ff · 03-10-2005, 08:30 AM

Once you figure in the CPO premium + the dealer premium for a used BMW, you're looking at over $5000 lost. You can pay for a lot of repairs with that kind of money.

CPO makes no sense to me, personally.

dan · 03-10-2005, 10:04 AM

Quote:

Originally Posted by ff

Once you figure in the CPO premium + the dealer premium for a used BMW, you're looking at over $5000 lost.

but who would be dumb enough to pay that much?

our CPO had no such premiums (some maybe, but nothing close to $5000)

ZBB · 03-10-2005, 01:31 PM

I just bought a CPO e39, an '03 with 23k miles.

Did I pay a premium to get the CPO? Sure, and probably right around ~$3500 vs what I could have bought the car off someone on the street.

But BMW's own extended warranty for the same term costs ~$2300 (or more if you buy it from a dealer that gouges). Additionally, my e39 has brand new tires (including the spare) put on by the dealer as part of the CPO, so I don't have to spend ~$1000 in the next few monts for new tires. And I didn't have to scour adds and find the right car. If the dealer hadn't had that e39 at the time, I would have waited (and probably ended up with something else in 6 months)

Sounds fair to me. And now I have a car that has 4 years and 77k miles remaining on its warranty.

Rob · 03-10-2005, 01:41 PM

Josh, I was in your shoes last year (although not the three year plan part). I recommend staying out of CTS-Vs unless you want to plunk down a bunch of cash.

The CPO warranty on my e36 M3 paid for:

Water pump
thermostat housing
transmission

I think that's it. It might still pay for the radiator for the new owner. The transmission repair, obviously, made the CPO worthwhile. Plus, I only paid something like 28k for the car. I sold it two years later for something pretty close to that, so there are times when it's very beneficial.

As for why people buy from dealers, besides what was already mentioned, there is always selection. Lots of people go out to buy a car, wander through a few lots, pick one, and drive it home. Not "us," but lots of people.

03-09-2005, 10:13 PM	#1
Josh (PA) Hello. Join Date: Mar 2004 Carmudgeonly Ride: '09 X3, '11 328xiT, '11 135i C, '17 c2, '19 X5 Location: Downingtown, PA Posts: 5,531	Posted this at the 'fest but feel it better fits here I still lurk here a lot, and felt this post I made at the 'fest better fits the mood of this board. I too waffle on my next car purchase and put way too much energy into a decision that's 3 years away. One thing I've been thinking about lately is how worthless the CPO program is. Am I missing something on it, or are my thoughts from this post pretty much spot on? For the record, I flat out love my e36 m3, and can't find anything new or used that measures up. I've put 50k miles on it in just over 2 years (80k total) with no problems, but kids are in the future and space will become an issue. Bimmmerfest Post Below: This is something I've been thinking about for a couple of days now. The idea started with one of my normal fantasies about what car I'd buy next (currently scheduled for 2008). I narrowed it down to a new e90 m3 4 door, or a used e39 M5. Assuming a 4 year old m5 is 20k less than the m3, the m5 would be my choice hands down. But, I've been debating with myself the idea of new vs used cars. On top of that, if I bought used whether there's any true advantage to CPO/dealer cars over private sales. I can understand and justify wanting a new car for the free maintenance/full warranty and ability to order a car to your exact specifications at the expense of the huge early depreciation curve, higher price, weaker negotiation position, etc. Where I'm really having trouble is justifying why I would ever buy a used car off a dealer lot (which I've done 3 times in the past). Looking at Edmunds it seems like, on average, used cars at dealerships are ~3-5% higher than used cars at private sale. For what? What happens to a used car on a dealer lot that justifies say ~$1500 extra over a car an individual is selling. On top of that CPO cars are another ~$3k to $4k. I see no real value in the CPO warranty or inspection. I've owned 3 CPO cars and the only thing that's ever broken and been covered (at the $50 deductible) was a leaky differential seal on my wife's e46. In the past I bought into the "CPO inspection" and the fact that dealers wouldn't risk soiling their reputation and brand equity pushing garbage. Now I've found a good independent mechanic who I trust and I'd have him do a pre-sale inspection, which I'm certain would put me at a better purchase knowledge base than before. So am I missing something? Why are CPO used cars so hugely popular in the industry? What benefit is there to buying a used car from a dealership over finding one on your own? __________________ Josh (PA) - '19 X5 '17 991.2 C2 Cab '11 135i Convertible '11 328xiT '09 X3

03-09-2005, 10:34 PM	#2
ARCHER Crotchety Join Date: Oct 2003 Location: Texas Posts: 1,354	Given that I am planted firmly in the performance niche market, as suspect you are, a CPO car carries precious-little weight with me anymore. There are plenty of nut-job owners out there (and TD can back me on this - cough Scott cough) who have been pampering their low-miles garage queens, to a disturbing degree, since the day they left the showroom. They are out there. And when you find one, it is quite obvious. You just have to be patient. __________________ Marching to The Chrome-plated Megaphone of Destiny...

03-10-2005, 03:56 AM	#6
Pinecone Carmudgeon Join Date: Dec 2004 Location: Maryland Posts: 2,717	WHo else has factory backed maintenance agreements avaialbe? D-C has factory extended warranties. And Ihave had those, and they are very nice to have to cover the various things that go wrong after the normal warranty expires. Now that BMW has both available, I will definately get the extended maintenance agreement onteh M3 (the Inspections can be worth it), even though I do my own brakes and other wear items. __________________ Terry Carraway 2002 Topaz E46 M3 2000 Dakar M Roadster 1995 Alpine E36 M3 LTW 1990 Red/White Spec Racer

03-10-2005, 01:31 PM	#9
ZBB Relic Join Date: Oct 2003 Carmudgeonly Ride: A very fast golf cart Location: The Valley of the Sun Posts: 12,821	I just bought a CPO e39, an '03 with 23k miles. Did I pay a premium to get the CPO? Sure, and probably right around ~$3500 vs what I could have bought the car off someone on the street. But BMW's own extended warranty for the same term costs ~$2300 (or more if you buy it from a dealer that gouges). Additionally, my e39 has brand new tires (including the spare) put on by the dealer as part of the CPO, so I don't have to spend ~$1000 in the next few monts for new tires. And I didn't have to scour adds and find the right car. If the dealer hadn't had that e39 at the time, I would have waited (and probably ended up with something else in 6 months) Sounds fair to me. And now I have a car that has 4 years and 77k miles remaining on its warranty. __________________ ZBB

03-09-2005, 10:36 PM	#3
zach swinging for the fences Join Date: Oct 2003 Carmudgeonly Ride: 987, X7 M60i, e36 M3 Location: Boston, MA Posts: 5,037	The only reason I bought my car CPO was for the extra warranty. It was leftover CPO though, as I bought it from a private owner.

03-10-2005, 08:30 AM	#7
ff . Join Date: Mar 2004 Posts: 13,514	Once you figure in the CPO premium + the dealer premium for a used BMW, you're looking at over $5000 lost. You can pay for a lot of repairs with that kind of money. CPO makes no sense to me, personally.

03-10-2005, 01:41 PM	#10
Rob The user formerly known as rwg Join Date: Oct 2003 Carmudgeonly Ride: Z4 Location: Vegas baby! Posts: 8,261	Josh, I was in your shoes last year (although not the three year plan part). I recommend staying out of CTS-Vs unless you want to plunk down a bunch of cash. The CPO warranty on my e36 M3 paid for: Water pump thermostat housing transmission I think that's it. It might still pay for the radiator for the new owner. The transmission repair, obviously, made the CPO worthwhile. Plus, I only paid something like 28k for the car. I sold it two years later for something pretty close to that, so there are times when it's very beneficial. As for why people buy from dealers, besides what was already mentioned, there is always selection. Lots of people go out to buy a car, wander through a few lots, pick one, and drive it home. Not "us," but lots of people.