Learn me CPO pricing

So I have my eye on a Mazda CX-5, but it's a bit more than I'd like to spend. So I decided to see if there were CPO cars available.

A local dealer has a 2014 CPO with 15,000 miles. It's priced at $19,999. OR they have a brand-new 2015 CX-5 (same equipment) with zero miles for $22,000 plus a $750 rebate.

(For the mathematically challenged, that's $1250 more than the CPO unit.)

What the heck?? Where's the value proposition in a CPO vehicle, when I can spend an extra $1250 and get the new one?

Maybe they have more margin to work with on the CPO to give you a higher discount off "list"?

Sort of quasi-related, I've been renting a ton of cars lately through Enterprise so I've had a lot of time riding back and forth to their office to chat up the employees. Apparently, it is not unusual for a dealer to call them up, offer them a great deal on three or four new cars with the stipulation that after their first oil change the dealer gets to buy them back. I can only assume that they're doing this to get some good CPO cars on the used lot in a relatively short period of time.

I've been told that CPO typically adds $750-$1500 to the price of the car. I agree, that Mazda deal is silly. But there is probably a little room to move on the used one if you make an offer. But it would need to be quite a bit of room before I jumped on it. Then again, I have actually seen 1 or 2 instances where a lightly-used year-old car was priced higher than a very similar new model at the same dealer. So make of that what you will.

I asked a dealer about this when I was shopping for a vehicle that used vs new was only 1500 different on a 28k price. They said most of the buyers of the pre-owned are people who don't get the good financing on the new vehicle and are trying to buy at the absolute Max of their limit. In those situations they want a vehicle but the extra $20/mo to go new on top of the $380/mo for used is a literal no go for them.

He also pointed out by the time you get done with the average finance manager sales the price delta grows.

Sometimes the CPOs carry a better warranty than new. Our Odyssey CPO had a powertrain warranty to I think it was 5 years, 60k, as opposed to 3/36 for a new one.

CPO is kind of a joke... at least it was at the dealers I worked. They had to show as a CPO; low miles, clean looking, newer than a certain year... but the CPO was a gimmick. We just charged more for what looked like a clean car. The additional revenue was used actuarially to cover any additional warranty repairs that we might get on the car. It was just a way for us to jack up the price $1000, and the chances that we would get a warranty claim on the car were slim - primarily because most CPOs are still under a factory warranty.

Same thing with car parts. Sometimes when you buy the better brake pads its the same pad in a gold box. You're paying for the fact that they might have to replace them on their dime, not necessarily for a better brake pad.

CPO is a money trick. Making you think you're getting a premium car, but you're just paying a premium for an insurance policy.

Its a money trick that WORKS, especially with high end/luxury cars (Audi, Merc, BMW, Porsche).

Everyone talks about getting a cpo if going used. Spoiler alert, as long as the car runs and drives with no issues, you aren't getting anything better.

People treat cpo cars like buying a remanufactured piece of equipment, which is just all sorts of ridiculous thinking.

curtis73 wrote: CPO is a money trick. Making you think you're getting a premium car, but you're just paying a premium for an insurance policy.

Well, yeah. I figured most people understood that.

I bought my 3-year-old E46 as a CPO car from a BMW dealer. It carried about a year of factory B2B warranty, and then the CPO warranty kicked in which gave me powertrain and most systems coverage for an additional 2 years / 30,000 miles after that (or so; I forget). There was very little that was excluded. It was effectively a new-car warranty on a used car, minus the "free" maintenance. I don't know how much total the dealer had in the car, but based on my price research, it didn't add much to the cost of my car - less than a grand.

I would personally prefer to buy what I want and then purchase an extended service plan before placing any additional value on a CPO.

But I think in your example, I would clearly go new. They will both take a big depression hit as soon as you buy it, but that's 15k miles of driving with your butt in the seat and not some unknown person's butt. Seriously... who knows what is on those butts anyway?

HiTempguy wrote: Its a money trick that WORKS, especially with high end/luxury cars (Audi, Merc, BMW, Porsche). Everyone talks about getting a cpo if going used. Spoiler alert, as long as the car runs and drives with no issues, you aren't getting anything better. People treat cpo cars like buying a remanufactured piece of equipment, which is just all sorts of ridiculous thinking.

But, but, 100-point inspection!!!

IMO, it's the warranty. People (including me) are a bit freaked out by how complex and expensive newer cars are to fix if something goes wrong, especially luxury-brand cars. So having that peace of mind is worth paying a bit extra for some folks. Also, with some cars the gap between new and CPO is quite a bit larger, so it's worth it.

I just looked up Honda's CPO program - the limited powertrain warranty goes for 7/70k from the in-service date. That's far better than the factory 3/36k, but I believe you can add the HondaCare warranty to the new car purchase and get the same benefit (but at additional cost). You also get a 1yr/12k non-powertrain warranty after the original factory warranty expires.

Financing is another item, sometimes you can get more attractive financing than another used car because it's a CPO (but usually not as good as when buying new).

Datsun1500 wrote: (assuming it's the gray one at Centennial)

Dang, you're good! :)