# Why would a dealer choose not to CPO a car?



## M1Fan (Oct 20, 2011)

Looking at a 2009 535i with under 28,000 miles, a little over 1 year left on factory warranty from original in-service date. CARFAX and service history look good, no outstanding recalls, 1-owner leased. Originally sold, leased, and maintained by the selling dealer. Dealer has good reputation.

Not CPO'd. In fact, it seems like none of this dealer's newer used cars are CPO'd, only the slightly older ones that might be past or near the 4/50,000 mark. (This is just a broad generalization I made at a glance)

From looking at the CPO checklist, since the CARFAX looks good, there seems to be only two other reasons for CPO non-eligibility: irregular or inconsistent service records and non-BMW modifications. I think they're both rather unlikely given the circumstances, especially the former, but I am asking about them nonetheless.

So...are there any other legitimate reasons for not CPOing a car? Perhaps financial? The car appears to be in great shape--spotless and well taken care of, pristine carpet, etc. Runs strong. Smells new inside.

At face value, I'd rather save on the expense of having to pay a CPO "premium" on this _particular_ car; could the dealer be thinking similarly about having to pass the cost of certification along to their prospective buyers? (yes, I know, but I've read most of the other CPO-related threads here) If I bought this car, I'd have over 1 year and 20,000 miles of factory warranty left, and when it runs out, I'd be more interested in a more comprehensive 3rd-party extended warranty than the 2-year somewhat-less-than-factory CPO extension anyway.

Am I missing anything here?


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## adrian's bmw (Feb 14, 2003)

Sometimes, on models (specifically, model years) that don't have special CPO financing, it makes it more marketable (more attractively priced and less expensive) to not certify it and simply offer an extended warranty. 

There can be some circumstances like not doing an oil service when it's due (this can happen on very low mileage cars where client's simply forget) that can make a model ineligible. 

The other reason could be if they paid all the money (a premium whether it be as a trade-in, from the auction, or as a lease return from BMW FS) on that car and don't want to bury themselves with the CPO expense and be forced to price their car above market and other comparable models.


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## M1Fan (Oct 20, 2011)

adrian's bmw said:


> Sometimes, on models (specifically, model years) that don't have special CPO financing, it makes it more marketable (more attractively pricedless expensive) to not certify it and simply offer an extended warranty...


Thank you very much for your response. This was exactly the case and further affirms my comfort level with purchasing this car. Thanks again!


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## BMWofBloomfield (Nov 7, 2008)

To add on to what Adrian said. One other reason certain great cars are not CPO'd is if the vehicle comes with desirable but, unoriginal parts. For example, a vehicle traded in or returned from lease with a nice set of aftermarket rims would need the rims replaced with OEM rims FIRST before it could be CPO'd. So if the expense to make a particular BMW conform to OEM specs plus the cost of the certification process makes it more expensive than average market CPO pricing, a dealer probably wouldn't CPO. Doesn't happen a lot but, it does happen.


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## M1Fan (Oct 20, 2011)

Got it, thanks. The "non-BMW modifications" applies to wheels also. Might this apply to non-OE tires as well?


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## mclaren (Jan 5, 2005)

Yes, I traded in a BMW with perfectly good tires that were not oem and the dealer didn't CPO it.


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## ard (Jul 1, 2009)

A dealer should be willing to CPO a _particular_ car if you pay for it...if they will NOT, then I'd be concerned. The salesmen above give plausible reasons as to why a dealer might not CPO cars as a rule, but YOU are only interested in ONE car. Their general explanations should not, in fact, make you more comfortable....

It's pretty simply- tell them "I want you to CPO it, and I will pay the cost of the CPO with BMWNA and the inspection cost". See what they say. It might be that brakes are at 40%.... BMW will only replace these for free once they are down the the wear indicators...but the CPO requires them over 50%. To cpo it, dealer eats the brake job. Same with tires. Tires under 50% will not qualify for CPO. (And yes, tires need to be OE spec.)

There can be darker reasons for not CPOing a car too.

Will you get a PPI? Or just assume it will be OK?


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## M1Fan (Oct 20, 2011)

Thank you for your opinion, but with all due respect, I reserve the right to determine what I'm comfortable with 

I don't want to pay for CPO if the situation doesn't warrant it; based on what I see in the CPO checklist and what is documented about the car, I'm satisfied that it isn't warranted in this case. It's still under factory warranty and I am going to go with a 3rd-party extended warranty that offers better value than the CPO extension anyway. I'll pay for the wear items as I need them instead of up front.

Again, I appreciate the input; it certainly adds to the spectrum of things to consider while diligently shopping for a used car.


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## adrian's bmw (Feb 14, 2003)

M1Fan said:


> Thank you for your opinion, but with all due respect, I reserve the right to determine what I'm comfortable with
> 
> I don't want to pay for CPO if the situation doesn't warrant it; based on what I see in the CPO checklist and what is documented about the car, I'm satisfied that it isn't warranted in this case. It's still under factory warranty and I am going to go with a 3rd-party extended warranty that offers better value than the CPO extension anyway. I'll pay for the wear items as I need them instead of up front.
> 
> Again, I appreciate the input; it certainly adds to the spectrum of things to consider while diligently shopping for a used car.


Here's a caveat. If a car is presented for sale as a non-CPO, you can't go in there and say, "Hey, I want you to have it certified." There is no after the fact CPO.

Really the only situation where a client could make a decision to have a car CPO'd is someone who intends to buy their leased vehicle.

As long as your happy with everything, then it sounds like you're good to go.:thumbup:


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## dtc100 (Jan 24, 2011)

adrian's bmw said:


> Here's a caveat. If a car is presented for sale as a non-CPO, you can't go in there and say, "Hey, I want you to have it certified." There is no after the fact CPO.
> 
> Really the only situation where a client could make a decision to have a car CPO'd is someone who intends to buy their leased vehicle.
> 
> As long as your happy with everything, then it sounds like you're good to go.:thumbup:


Can a potential buyer insist that the dealer perform all necessary warranty repairs first?

If the dealer will skip the CPO inspection, can a potential buyer take it to an indy shop, then get a list of items, bring it back to the dealer for repair before the sale, assume all the repairs or adjustments are covered by the warranty?


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## ard (Jul 1, 2009)

adrian's bmw said:


> Here's a caveat. If a car is presented for sale as a non-CPO, you can't go in there and say, "Hey, I want you to have it certified." There is no after the fact CPO. .:thumbup:


WHAT?!?!

A BMW can *certainly* CPO a car at the request of a buyer!

They cannot CPO a car _after it is purchased_...but surely prior to a purchase.

I'm not sure if you are purposefully being misleading or something is lost in translation.


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## ard (Jul 1, 2009)

M1Fan said:


> Thank you for your opinion, but with all due respect, I reserve the right to determine what I'm comfortable with
> 
> I don't want to pay for CPO if the situation doesn't warrant it; based on what I see in the CPO checklist and what is documented about the car, I'm satisfied that it isn't warranted in this case. It's still under factory warranty and I am going to go with a 3rd-party extended warranty that offers better value than the CPO extension anyway. I'll pay for the wear items as I need them instead of up front.
> 
> Again, I appreciate the input; it certainly adds to the spectrum of things to consider while diligently shopping for a used car.


A CPO will give you a "BMW 6/1000 Gold Warranty"...this warranty is worth $3500-4000. The COST to you to add a CPO should be $2000-2400. (Assuming there is no need for brakes, tires, etc)...the checklist and the inspections are all worthless.... you should not reply in the fox (dealer) to inspect the henhouse. A ppi is recommended. Even with a car under warranty- unless you are an expert.

If you are buying a 3rd party warranty for under 2400, it is crap.

and you are certainly welcome to decide what you are comfortable with...I figure $2400 for a CPO/Gold warranty is a no-brainer.


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## adrian's bmw (Feb 14, 2003)

dtc100 said:


> Can a potential buyer insist that the dealer perform all necessary warranty repairs first?
> 
> If the dealer will skip the CPO inspection, can a potential buyer take it to an indy shop, then get a list of items, bring it back to the dealer for repair before the sale, assume all the repairs or adjustments are covered by the warranty?


Firstly, a decision is made on whether a BMW or not to certify a BMW. If it's going to be certified, then it is enrolled and put through the shop. The checklist is performed and the BMW is brought up CPO guidelines. If the shop bill gets crazy expensive (needs more recon that can't be claimed under warranty or maintenance like tires, brakes, etc), the center can withdraw the enrollment and sell as a pre-owned BMW.

If it isn't, then it is presented as pre-owned BMW and not a CPO. Once that decision is made, you cannot go back and certify that BMW. A client can't walk on the lot, see a BMW for sale and say, "Hey, how much will it cost me to certify this?" It doesn't work that way.

Sure, but making warranty repairs is one of the ways of earning revenue for service departments, so why wouldn't the center perform anything that's wrong with the car prior to making the vehicle available for sale that's covered under warranty?

For example, if a car is under warranty, you take it for a test drive and notice that the radio is not working, then you can definitely claim that under warranty. If it makes you feel comfortable to take it to an indy shop for inspection, I'm sure they'll let you and if they find anything that the center missed or didn't claim, then I wouldn't see a problem with it. But that would ultimately be an arrangement between you and the selling center.


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## dtc100 (Jan 24, 2011)

Good to know Adrain, thanks!

I have read too many horror stories here and there, which were somewhat backed up by my own experience (though not of my BMW but other brands) that I no longer put my trust in the dealers' shops when it comes to inspections and warranty repairs.


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## ard (Jul 1, 2009)

adrian's bmw said:


> If it isn't, then it is presented as pre-owned BMW and not a CPO. Once that decision is made, you cannot go back and certify that BMW. A client can't walk on the lot, see a BMW for sale and say, "Hey, how much will it cost me to certify this?" It doesn't work that way. .


1. A "CPO" is, in fact, a "Pre-owned BMW"...no matter how you want to spin the whole "CPO scam', these are used cars. A cpo is a used car with tires and brakes over 50% and good paint.

2. A Client can ABSOLUTELY request the dealer to CPO a car that was not yet CPO'd. You are hiding behind a strawman to try and manipulate the readers: specifically, you say_ "Hey, how much will it cost me to certify this?" It doesn't work that way_

Well, duh, True the_ buyer_ cannot CPO the car... _*the dealer will cpo it if he wants to sell it*_...there is no 'price' for the cpo, there is only the price of the car...it's all an amorphous negotiation.

So a buyer CAN walk onto the lot, see a car selling for $47k, and say "I'd buy that car for $49k if it was CPOd".... If he and the dealer come to terms, and the dealer CPOs it, and the buyer buys it, then wouldn't you say the buyer DID ask for and get a CPO?

I am really tired of salesmen painting the whole used car process as some regimented process with rules and integrity. YOU may have some, the industry generally does not.


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## adrian's bmw (Feb 14, 2003)

ard said:


> 1. A "CPO" is, in fact, a "Pre-owned BMW"...no matter how you want to spin the whole "CPO scam', these are used cars. A cpo is a used car with tires and brakes over 50% and good paint.
> 
> 2. A Client can ABSOLUTELY request the dealer to CPO a car that was not yet CPO'd. You are hiding behind a strawman to try and manipulate the readers: specifically, you say_ "Hey, how much will it cost me to certify this?" It doesn't work that way_
> 
> ...


1. :rofl: CPO Scam?? Seriously? C'mon, man. Actually, there is a difference between presenting a pre-owned BMW and a CPO on the lot. A pre-owned BMW doesn't get the CPO checklist performed after enrollment. It doesn't get CPO rates. Sure, if you want to get into semantics, they're both pre-owned BMW's.  And it's a lot deeper than just paint, tires, and brakes, but you're entitled to your opinion.

2. No, they cannot. If a center does that "after the fact" CPO and gets audited, they get fined. If the car is in the back lot that just got dropped as a lease return or purchased at the auction or traded in, client walks back there with the CA and asks, "hey, can I get that as a CPO?" Then, that's a maybe. But it's not the customer's decision. It's ultimately determined by eligibility, cost of recon to bring up to CPO, and whether it makes sense to market it as a CPO. The dealer/seller will make a decision on how they want to sell the vehicle and what makes the most business sense in terms of marketing that car. Yes, the price is the price, CPO or non-CPO, but they're valued differently and there's so many moving parts anyway like mileage, condition, options, color, etc.

Indeed, there's no "price". It's value, peace of mind, and even financing. I'm not trying to manipulate anyone. I'm expressing what I know and providing my input. Simple. If you interpret that as manipulation, well, that's unfortunate.

BMW's pre-owned car business *IS* regimented and structured with rules and integrity. Centers abide by the guidelines and in turn, run a good operation. Why would it be anything less? :dunno: But yes, there may be some bad apples out there that deviate from these guidelines. I should hope that it's rare.


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## SARAFIL (Feb 19, 2003)

adrian's bmw said:


> 1. :rofl: CPO Scam?? Seriously? C'mon, man. Actually, there is a difference between presenting a pre-owned BMW and a CPO on the lot. A pre-owned BMW doesn't get the CPO checklist performed after enrollment. It doesn't get CPO rates. Sure, if you want to get into semantics, they're both pre-owned BMW's.  And it's a lot deeper than just paint, tires, and brakes, but you're entitled to your opinion.
> 
> 2. No, they cannot. If a center does that "after the fact" CPO and gets audited, they get fined. If the car is in the back lot that just got dropped as a lease return or purchased at the auction or traded in, client walks back there with the CA and asks, "hey, can I get that as a CPO?" Then, that's a maybe. But it's not the customer's decision. It's ultimately determined by eligibility, cost of recon to bring up to CPO, and whether it makes sense to market it as a CPO. The dealer/seller will make a decision on how they want to sell the vehicle and what makes the most business sense in terms of marketing that car. Yes, the price is the price, CPO or non-CPO, but they're valued differently and there's so many moving parts anyway like mileage, condition, options, color, etc.
> 
> ...


+1

ard, you make a lot of comments like you know how everything works, yet you criticize the people that actually DO know how things work when they post it here. Some dealer folk are actually here to provide real info... please give them a break every once in a while instead of always saying that they're trying to manipulate or lie to people.

I was a CPO manager at a BMW for many years. I know all of the CPO rules. Adrian is 100% correct. Yes, a dealer "technically" has the ability to CPO a car for the customer walking on the lot if they want to like you suggest... but doing so is in violation of BMW's CPO program guidelines that all BMW dealers participating in the CPO program agree to. BMW regularly audits their dealers and their CPO transactions to ensure that everything is done by the book. This scenario that you describe is a very easy way to get in trouble-- I've been in that tough spot of having to explain why the dates don't look right and it's not pretty. Do it once and you might get a slap on the wrist. Do it a few more times and you get kicked out of the CPO program and end up on BMW's **** list. At that point, if you are the sales manager, you're on the street looking for a new job.

Dealer acquires car.... Dealer decides "CPO or not?".... if answer was "no", they can't go back and change their mind later to make a deal. It's never fun to turn down a deal when someone comes in and says "I'll buy this if you CPO it" (also been there tons of times), but it's also not worth taking the chance of getting caught and losing your job.


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## ard (Jul 1, 2009)

adrian's bmw said:


> 2. * No, they cannot. If a center does that "after the fact" CPO and gets audited, *they get fined. If the car is in the back lot that just got dropped as a lease return or purchased at the auction or traded in, client walks back there with the CA and asks, "hey, can I get that as a CPO?" Then, that's a maybe. But it's not the customer's decision..


Again, you keep insisting on calling this an 'after the fact CPO'.... I am simply saying CPOing it prior to sale....

Sarafil- How many days does the dealership have before it is "Illegal" (ie a violation of the stated policy) to CPO a used car THAT THEY OWN? (not a customer car, but a used car on their lot). Because I've never heard there is a number....

I mean one of you says "technically" it can be done...and the only thing Ive seen in the CPO policy is "car comes in and a decision to CPO is made". This is a far cry from 'CPO decision must be made within X days' or "Car cannot be CPOd after it is offered for sale as a used BMW".

So is this a violation of the 'spirit of the CPO program' or an actual violation? (And to be clear, we are NOT talking about fudging dates or dates that are backwards...OK?)

Simple question, what does the policy say?

And we all agree that it isn't the customers decision ( but the customer can ultimately not buy it.)

Finally, while I do appreciate both your insight and access to certain information, saying 'we know, we are inside, trust us' is not the same as citing actual hard policies. I tend to chose a path through an issue that makes sense to ME, and then let others resist...as opposed to asking salesmen, (other businesses along the way, regulators, etc, etc) what they'd like me to do. In other words "I'll take this if you CPO it- make it happen" as opposed to "would you CPO this for me, pretty please"

A


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## SARAFIL (Feb 19, 2003)

ard said:


> Again, you keep insisting on calling this an 'after the fact CPO'.... I am simply saying CPOing it prior to sale....
> 
> Sarafil- How many days does the dealership have before it is "Illegal" (ie a violation of the stated policy) to CPO a used car THAT THEY OWN? (not a customer car, but a used car on their lot). Because I've never heard there is a number....
> 
> ...


The short version: It is a violation of the policy. The policy says that once a decision is made to offer a car for sale as "used" (not CPO), it can not be re-classified as a CPO to make a sale.

The longer version: There is no clear number of days, but the car must be enrolled in the CPO program before it ends up "for sale" on your lot if you want to CPO it. The ultimate decision about if you broke the rules or not is determined when the auditors come in. They look at every piece of paper and every record associated with the car... when did you acquire it, when did you write a "get ready" to have the service department look it over, when they they open their repair order for the used car inspection, when were repairs completed, when did it get detailed, when did you write up your purchase order on the eventual sale, what was the ultimate delivery date, etc.

It is possible in some cases that you might be able to sneak something through without getting noticed... i.e. a car is traded in today, dealer does not plan to CPO it, but you come in next week and see it and want it CPO, and you come to terms before they start the used car inspection process. They might be able to put it through CPO a week later without generating many questions from the auditor. But those scenarios are rare.

What typically ends up happening... car comes in today, dealer decides "no" on CPO, proceeds to input it in to their BMW inventory system as "Used" (they have to select a dropdown option of "Used" or "CPO", so hard to say you meant to CPO it from day one if you enrolled it as "Used" at that point), they write a get ready for a "used car inspection" and not a "CPO inspection" (yet another item in the paper trail), service department looks it over using a used car inspection checklist (different from the CPO checksheet that normally gets attached on the repair order)....... fast forward a few days or even weeks........ car is now on the lot as a non-CPO car. Now you, Mr. Customer, come in and say "I want it CPO". What does dealer do? They have to enroll it in the CPO program, which requires going in to BMW's system, deleting the car, and then adding it back in and selecting "CPO". Then they go back to the service department and say "look this over to do anything else that it needs to meet CPO" which generates more paper trail.

Bottom line, when the auditors come in, they have the BMW system records showing when the car was input as a "Used" car, they have access to your repairs orders from the service department showing it only went through a used car inspection, and they have the records from the date you enrolled it.

Sorry for the long-winded response, but bottom line is: as soon as they input the car into their system and select "Used" as vehicle type (vs. CPO) and then they have their shop do a used car inspection (vs. a CPO inspection), it is too late. There is no specific time element, that can vary based on how quick a dealer is-- some can complete this process in hours from when the car comes in, and some take weeks.

This is right up there with selling new BMWs for export... you might find a dealer that will do it, but they are on borrowed time until they get busted and have to pay the price for violating BMW policy.


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## M1Fan (Oct 20, 2011)

So per policy, dealer decides whether to CPO a used car before offering it for sale. Reasons for not CPOing a given car are varied, and ultimately it is up to the buyer to understand these reasons and incorporate them into the purchasing decision.

Thank you all for the insightful input. It has helped to affirm my decision and I hope it helps others, whatever the particular situation. One size does not fit all!


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