Why Buy Certified Pre-Owned?
In this iDriveSoCal Podcast, I go to Martin Chevrolet in Torrance, CA to get honest behind the scenes details on buying a certified pre-owned Chevrolet. And you’re going to want to listen closely to this one.
That’s because my friend Lewis Cook, who’s the general manager of Martin Chevrolet, really doesn’t hold anything back. He even tells us exactly how much it costs Chevrolet dealers to certify a vehicle! Click play below and enjoy. :0)
Chevy Certified Pre-Owned – aka CPO
Lewis: The factory gets involved heavily. They go through this 172-point inspection.
They go through a Carfax and DMV history and everything, really. I mean, they try to make this car as new as possible.
You can get that interest rate close to what a new car interest rates are. It takes that extra cost out of the picture.
Tom: Welcome to iDriveSoCal, the podcast, all about mobility from the automotive capital of the United States, Southern California.
Tom Smith here and I am excited to be at Martin Chevrolet in the Los Angeles suburb of Torrance, California, with Mr. Lewis Cook, General Manager.
Tom: And this report we are bringing to you, obviously live from Martin Chevrolet, but certified pre-owned, the benefits of Chevrolet certified preowned. The certified pre-owned programs have—what are they? They’ve been out for a while now, haven’t they?
Lewis: Yeah. I think each factory has some kind of rendition of a certified program.
Tom: Basically, it’s a pre-owned vehicle, but it’s a pre-owned vehicle that the factory kind of gives its blessing to at a—
Lewis: If you want to call it a blessing, okay.
Tom: [Laughs] At a higher level of specification, as far as the overall condition of the vehicle, right?
Lewis: Yeah. I joke about blessing and the reason is for—
Tom: Are we going to get religious now?
Lewis: This is actually pretty funny, and this is unscripted.
My mechanic just walked in and he has a certified pre-owned checklist in his hand. I promise you, this is unscripted.
Detailed Documentation to Certify a Pre-Owned Chevrolet
Tom: This is perfect!
Lewis: The reason why I say—
Tom: I know it’s unscripted because it’s like, he’s not wanting to come closer.
Lewis: He doesn’t want to come on camera. I’m not going to sign any—okay, I’ll sign it. But you need to leave this with me for a second, so give me a minute.
The reason why I laugh at the blessing is if you can see this vehicle inspection and re-conditioning, I’ll show it.
Tom: Let’s get a close up of that.
Lewis: I’ll show the camera on the podcast.
Tom: On the audio podcast, let me show you this! You see this right here, what I’m talking about?
Lewis: You see this, guys? This is what I’m talking about. You say a blessing, I say curse. Not so much. I’m being facetious.
Lewis: It’s a 172-point vehicle inspection and reconditioning form. It’s two pages. There’s a ton of checkmarks on here, so basically what happens—
Tom: And now it has the boss’s signature on it, too, so this is a no joke thing.
172-Point Inspection for Every CPO Chevrolet
Lewis: No, it’s a no joke thing.
The factory is so much behind this and they’re so concerned about the condition of the vehicle, they make us check everything.
And when I say everything, I mean everything.
I have adapted here at Martin Chevrolet, we do this anyway. A lot of dealerships don’t.
It goes from 100-point inspection to 172-point inspection or what not. But they don’t miss a beat, as you can tell.
Tom: Yeah, this is intense. I’ve never seen one of these before, this is really cool.
Certified Pre-Owned Chevrolet = New as Possible
Lewis: By this paper, it’s super intense, and it takes a technician quite some time to go through it and make sure everything is checked off and that the car is good.
That’s kind of the whole theory behind it. The factory gets involved heavily because they want to make sure the dealer is doing the right thing.
They go through this 172-point inspection. They check everything and then they back the car, really, is what happens.
You get, for instance, with Chevrolet, you get access to OnStar again, if the car is certified, for free for a period of time.
You have the peace of mind that this car has been inspected with a fine tooth comb. They go through a Carfax and DMV history and everything, really. I mean, they try to make this car as new as possible.
Some of the benefits you’ll get that comes along with that, they’ll have some special interest rates.
And so, you can get that interest rate close to what a new car interest rates are, because there are some special interest rates on new cars, too, let’s face it.
Better Interest Rate Outweighs Higher Price w/ Certified Pre-Owned Chevrolet
Lewis: It takes that extra cost out of the picture because you got some special interest rates.
Tom: Right. That’s what I was going to say, I mean, that’s huge. If you’re looking at—pick a car and some numbers and let’s give a hypothetical.
Lewis: If you’re getting a new car, for instance, that has 1.9, 2.9, 3.9%, and interest rates nowadays are 4 or 5% easily. So, 1.9 on a new car, what’s the point of buying a used car at that point, right?
Lewis: The factory stepped in and said, “Hey, let’s support it and let’s do the same thing. Let’s give them that special interest,” so that cost of ownership can be a lot less.
Skip the Big Depreciation Hit!
Because typically, if folks are looking for a pre-owned car, they’re doing it because of either a budget or they’re frugal or they don’t want to take on the depreciation.
Tom: Yeah, that big depreciation piece, right? Soon as you roll a car off the lot or as soon as it gets titled, whatever.
The first owner takes the biggest hit in depreciation.
Lewis: That’s absolutely true.
In this case, now you have the depreciation hit taken. You have a completely inspected vehicle.
Then, you have factory-supported interest rates behind it. You have, like your OnStar subscriptions and stuff that you get for free for a certain amount of time.
The Biggest Factor of All – Certified Pre-Owned Warranty!
I guess the most important thing that we haven’t even mentioned yet so far, is that they back it with that warranty.
On Chevrolet, for instance, it’s a six-year, 100,000-mile powertrain warranty from the date of inception. From the first day that the car was sold, the first owner.
Tom: Sold new.
Lewis: First sold or sold new. If it’s a three-year-old car, essentially you have three more years or up to 100,000 miles. It’s huge.
Why Certified Pre-Owned @ Martin Chevrolet?
Lewis: It’s at really no expense to the consumer because it’s not even really built in. My cost to certify a car is $450. That’s the inside information you get here at iDriveSoCal.
I Love Lewis Cook’s Honesty!
Tom: Thank you for that! I’ve never heard such a thing! I love your honesty. I honestly, you know what? A lot of people say transparency, whatever, but I love your honesty, thank you. Seriously.
Lewis: I am to a fault sometimes, but we’ll get to that…
“It’s at really no expense to the consumer because it’s not even really built in. My cost to certify a car is $450.”
Lewis: Anyway, so now, if my cost is $450, what’s the maximum amount of that cost I can be passing off to the customer?
You know, for an extra $400, are you okay with the car having 100,000 warranty? I’m pretty sure you are.
Tom: Yeah, absolutely!
Lewis: Are you okay with the factory supporting the purchase with some good interest rates? Of course, you are.
Certified Pre-Owned Chevy’s – A Good Deal for All Parties
Lewis: It’s good all around, it really is.
In this day and market though, the new car world is so competitive and there are so many interest rates and so many rebates…
And just so much discount that you almost have to be aggressive in the pre-owned and the factories and the banks have realized that.
Tom: Let’s give it an example.
Pick a car and/or a price and let’s say, okay, that car at that price or that car is going to be non-certified and it’s going to cost this much, on average.
I mean, this is a hypothetical. Certified, it’s going to cost this much.
Going the Extra-Mile with CPO But Not Taking Credit
I do the inspection anyway. The techs are going to do the inspection, so there’s no extra cost there for me.
Tom: Let me stop you right there.
Another Reason I Support Martin Chevrolet!
Because that’s actually a selling point of Martin Chevrolet. You, personally, Lewis Cook, General Manager of Martin Chevrolet, you’re doing this inspection on your used cars anyway?
Lewis: Correct. No matter what it is.
Tom: The fact that you’re certifying it too is just paperwork?
Lewis: Correct. Absolutely.
And it’s a small fee that I pay to the factory. In reality, I can only certify a Chevy product.
If I only offered Chevy preowned product, that would be kind of silly. We take in trade-ins all the time that aren’t Chevys, right?
All Martin Chevy Pre-Owned Vehicles are Thoroughly Inspected
Lewis: I can’t certify those cars. Those cars aren’t backed by the factory. How do I create value there?
We just go through the same process. If you go through the same process, the car is still in the best condition possible.
You have the same factory-trained technician, like Mario.
Tom: Mario, who is waiting for his 172-point inspection! [Laughs]
Lewis: Would you like your 172-point inspection back, Mario? You can have it back, brother.
He’s on the clock. I got to pay less so that I can pass the savings onto the customers, right? Oh, you want me to sign it?
Tom: Thank you, Mario. This 172-point inspection is no joke.
Lewis just had to sign the document again and that was totally unscripted. That was perfect!
Lewis: So perfect! It was perfect. It couldn’t have been any better.
Tom: It was so totally unscripted. Mario is just standing there with his arms folded, like, “Are you guys going to wrap this one up soon?”
Lewis: Yeah, our average podcast, guys, has been 30 minutes. I’ve been told I’m very long-winded. I apologize for that.
Tom: It’s great information on cars.
Officially Certified Pre-Owned or Not – Transparency is Key
Lewis: If I have a Honda Civic or anything, a Toyota, whatever, that we’re going to sell on the pre-owned lot, I mean, it’s conducive for us to do that.
It makes sense to me only to go through the same process is putting their cars through and offering these warranties.
Let’s face it, I mean, transparency here we go. I don’t want you guys coming back pissed off. Right?
Tom: Of course.
Lewis: I want to put the best product out there possible so there are no repercussions.
It is a machine and they do break down and that’s just part of the deal. The closer you inspect, the more diligent you are, the better the product.
And, that’s kind of what the factory did and so we do that across the board.
Tom: You know, it’s interesting, the intention of this podcast was to talk about the benefits of certified pre-owned, but—
Lewis: Are we not doing that?
Tom: No, no, no, we absolutely are. We absolutely are.
But I just wanted to shine a bright light on you, Lewis Cook.
And then, also on Martin Chevrolet that, hey, you’re going through your pre-owned inventory so thoroughly that it is close to being certified anyway.
I think that’s a really good thing and it’s a selling point of your store and yet it’s another reason to come here to Martin Chevrolet.
The Behind the Scenes Difference @ Martin Chevrolet
Lewis: Yeah, there are lots of things like that behind the scenes that we do here, specifically. Listen, I’ve learned from my mistakes.
I’ve been doing this for a long time, and we keep going back to how long and we’re not going to talk about that. But I’ve been doing it for a long time, so I’ve seen a lot of things happen.
I’ve seen customers pissed off and not pissed off—I don’t know if I can use that word. It’s a podcast, I guess we’re okay. I’m not sure—upset.
You know, I don’t like dealing with that, honestly. I want to have fun and I want to talk about your kids, not your problems, right?
Lewis: It’s just part of the deal here with me and that goes with—that goes on with everything, really.
Tom: It’s a beautiful thing. I like it.
Lewis: It is. It keeps people coming back. Sorry, I’m moving your equipment here.
Tom: No, no, no, that’s quite all right.
But getting back to a vehicle that certified preowned…
And, promoting the Martin Chevrolet certified pre-owned programs… I mean, if I’m buying a pre-owned vehicle, especially here, I couldn’t imagine not buying one certified preowned.
Because of the extra value that I get by the lower interest rate through purchasing certified pre-owned, right?
[Sidebar] Bumpers and Parking in Chicago
Lewis: Absolutely. And the warranty.
Most vehicles come with a manufacturer’s warranty of three years or 36,000 miles, right? Bumper to bumper.
They call it bumper to bumper. Bumpers aren’t covered by the way, guys.
Tom: [Laughs] No, I used to live in—quick sidebar—I used to live in Chicago and the big difference between here, or Chicago and LA, is you talk about bumpers for some reason, I’m looking at a license plate holder.
Every bumper in Chicago has screw marks in it because of parallel parking.
Lewis: Parking is so tight!
Tom: [Laughs] I don’t know. I think that part has got to come out of the podcast.
Lewis: It’s fun! We are not going to fault you for being from Chicago.
Lewis: At least you came to the right place, right? You ended up here, that’s all that matters.
Tom: As the sun shines through the windows of Martin Chevrolet here.
Lewis: Beautiful downtown Torrance.
Tom: Sorry. I totally digressed.
Lewis: Back to certified, right?
Tom: Yeah. Enough about bumper screws.
Overall Benefits of Chevrolet Certified Pre-Owned Program
Lewis: Yeah, no. But it’s a great program and again, back to the cost of ownership…
I mean, let’s face it, cars are expensive.
Lewis: So, it just gives you that peace of mind, really.
Tom: All right. Well, fantastic.
As we wrap this one up, let’s hit the bullet points. The benefits of certified pre-owned: You’re going to get a lower interest rate.
Tom: You’re going to get—
Lewis: I say that. I mean, you got to say that, right? The interest rates aren’t always there, but most of the time, they are.
Tom: But when you say typically, you mean as opposed to…
Lewis: It’s a factory-sponsored thing, right?
So, the factory is going to step in. Or, the banks are going to step in and they’re going to partner up and they’re going to say, “Okay, lets do this program for this period of time.”
It’s not always like that, but the majority of the time, they are.
Tom: Okay. Benefits of certified preowned.
Lewis: Rates, competitive interest rates.
Tom: Competitive interest rates.
Lewis: 100,000-mile warranty.
Tom: 100,000-mile warranty.
Lewis: You get any subscription, whether it be OnStar or whatever, you typically get that for free.
I keep using the word typically, I shouldn’t do that. You do get that for free.
Tom: For a period of time.
Lewis: For a period of time, correct.
Tom: Now, the 100,000-mile warranty is the powertrain. You also get—what is that one?
Lewis: Yeah, that’s right, we didn’t even talk about that. In a Chevy specifically, you get a 1-year, 12,000-mile bumper to bumper.
Everything pretty much is covered, except wear and tear items. That’s from the time of sale.
Tom: From the time I buy that certified preowned?
Lewis: From when you buy that certified preowned.
And the 6-year, 100,000-miles from the time that the first customer or the very first owner purchased the vehicle.
Tom: So, interest rate.
Tom: One year, 12,000-mile warranty.
Lewis: Or 6-year/100 powertrain.
Tom: And 6-year/100.
Lewis: And 6-year/100 powertrain, yep. Activation subscriptions to OnStar and stuff like that. We have 172-point inspection.
Tom: And Chevy’s blessing.
Lewis: And Chevy’s blessing, yeah. And they’re strict, I tell you what, they are.
They’re very strict. Side note, they even have inspectors come out and check our work.
Tom: Is that right?
Lewis: It’s a serious program.
Tom: It’s that form, the 172-point inspection form, which is literally two pages.
Tom: And it was the—it’s the carbon paper, which I haven’t seen that in a long time, but it’s carbon paper, so there are multiple copies of that.
Tom: Your technician is signing off on that, who I’m sure is highly trained.
Lewis: I have to sign off on it.
Tom: You’re signing off on it.
Lewis: Yeah, personally.
Tom: And then on top of that, the manufacturer is coming out and spot checking your certified program from time to time?
Lewis: Correct. Correct.
Tom: That’s pretty tight.
Lewis: Doesn’t get any better than that.
Tom: No, no. All right, anything else on certified preowned?
Lewis: Are we at 30 minutes yet?
Tom: Half. More than halfway there. Do you want to stretch?
Lewis: I mean, no. We can do whatever you want.
I can keep talking about it, if you want. I mean, we’ve done 25 to 30 minutes on every other one, why not this one, too? [laughs]
No, I think that’s it. I think it’s a great program. I think the factory supporting it is huge. And it’s definitely something to consider.
Martin Chevrolet Transparency
Tom: And this is a great place to come. Come see Lewis Cook here at Martin Chevrolet. So happy to have you guys on board with iDriveSoCal.
Lewis: The clap is coming.
Tom: And Lewis’s clap is coming.
Lewis: You have to explain it now every single time.
Tom: Okay. We’ve recorded this twice now. This is actually our third podcast.
We’re doing something new. The podcast is obviously audio, right? But here we have video going.
In order to sync up the video with the audio—
Lewis: Tom’s mad at me now. [Laughs]
Tom: I’m going to get some kind of script down to explain this well.
In order to sync up the video with the audio, on the very first podcast that we did, I clapped, because that clap, it syncs up the video and audio.
It helps the editor to sync up the video and audio.
But that made Lewis laugh, so since then, Lewis has been our clapper.
Now, this clap actually is, think about the old school menu thing, right? With take one!
Lewis: Yeah, right.
Tom: Yeah, whatever. At any rate, Lewis, thank you again for being part of iDriveSoCal.
We’re going to wrap this up and Lewis is going to clap. That was me, Tom Smith, and Lewis Cook here at Martin Chevrolet in Torrance, California.
Lewis: I do my best to throw him off.
Certified Pre-Owned @ Martin Chevrolet
Tom: Just off of Hawthorne Boulevard. Thank you again. Thank you, as always, for tuning in, listening, watching, I don’t know, whatever you’re doing, but seriously, thanks so much.
For iDriveSoCal, I am Tom Smith. Thank you, as always, for tuning in, which I just said. Go ahead and clap, I’m totally throwing off my game.
Lewis: Yeah, I know, I love it. Mission accomplished. Thanks for having me. Here comes the clap. [Laughs]
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