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Old 03-10-2011, 01:31 PM   #1
AVANTI R5
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Default 10 Worst Values in Certified Pre-Owned Cars



These vehicles offer added assurance, but at a price. At what point are they no longer a good value?




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In today's economic twilight zone, a used car could cost more than an equivalent new one.

Consider that a popularly equipped 2011 Toyota Venza has a retail list price that is $755 lower than an equivalent 2009 model in top condition, according to data from Black Book in Gainsville, Ga., which has been tracking and publishing vehicle valuations for 56 years. Likewise, a 2011 Audi Q5 has a list price $620 lower than that of a 2009 model.

The reason is simple: supply and demand. "The value of used cars is up quite a bit since 2008," says Eric Watson, group manager of remarketing for Mazda North America. "There is more demand for high-quality used cars, and the reduced supply has definitely caused prices to increase."
Industry experts forecast that reduced production in recent and coming years will squeeze late-model used-vehicle inventories at least through 2013. That will create some interesting dynamics for certified pre-owned programs, which have received intense focus from automakers lately. About 1.6 million CPO vehicles are sold each year, Watson says.

Bing: CPO Deals
Click to enlarge picture
Toyota Tundra Double Cab




CPO Versus Used
CPO programs vary by manufacturer in coverage and cost, but they all share some things in common: The vehicles sold under CPO programs undergo a comprehensive, hands-on inspection by a qualified technician; they are reconditioned to a predetermined set of standards; and they include a warranty or extended service contract that covers key components.

Mazda revamped its CPO program last July and has seen sales jump 300 percent, Watson says. The company's comprehensive CPO warranty now covers 12 months/12,000 miles, versus three months/3,000 miles previously. Powertrain-only coverage is seven years/100,000 miles.

The warranty is what drives the price difference between a CPO vehicle and a noncertified used car, experts say. CPO vehicles generally cost between $800 and $1,500 more than noncertified used equivalents. The premium for CPO luxury vehicles is even higher, up to $3,000 in some cases.

The added cost for CPO models, coupled with higher financing rates compared with new cars, can sometimes push their price close to that of an equivalent new model or in some cases, even beyond.

"So when you look beyond the advertised price to what you can negotiate, and then factor in the financing, you often find there's not as big a difference between CPO and new as you originally might have thought," says Jeff Bartlett, Consumer Reports' online deputy autos editor.

That's particularly true in this environment of inflated used-car prices even more so when incentives on new cars are factored in. A 2011 Toyota Tundra Double Cab with 2-wheel drive and a V8engine could cost up to $3,141 less than a 2009 equivalent in top condition, thanks to a $3,000 cash incentive. And even without the incentive, the new Tundra would still be cheaper than the used one.

Read: Consumer Reports' 2011 Top Picks
Click to enlarge picture
Person Handing Key Over




Better Off Buying New
Automakers don't release CPO-specific data, nor are such data tracked by independent market-research firms. So to find out which CPO models represent the worst value relative to their equivalent new models, we had Black Book crunch some numbers.

The company compared retail prices of all 2011 models with those of equivalent 2009 models listed as "extra clean." The 10 vehicles with the smallest price difference between the 2011 and 2009 models made our list. As it turns out, four of the 2009 models cost more than their 2011 equivalent, which is a true testament to how topsy-turvy the car market is right now.

We also looked at cost of ownership as calculated by Vincentric, a research firm based in Bingham Farms, Mich. Vincentric combines Black Book pricing data with insurance, fuel, maintenance, repair, depreciation, interest and other projected costs to come up with a total cost of ownership over five years for both new and CPO vehicles. Once again, we compared 2009 with equivalent 2011 models.

All except one model on our list shows higher ownership costs over five years for the 2009 model than for the 2011 model. That's largely due to added depreciation, repairs and interest costs on the older cars. (Vincentric factors in warranty coverage both new and CPO when calculating repair and maintenance costs.)

A few things to keep in mind with this ranking: The models on the list reflect the most popular configurations for their particular trim levels, according to Black Book. We've listed incentives available for each model, as compiled by Consumer Reports, but did not factor them into the ranking calculation, because not everyone is eligible for them. Pricing data and incentives are current as of mid-February 2011. They represent a snapshot in time and will change.

The data do not reflect transaction prices; there is no readily available source for that information. So just because the 2009 Toyota Venza has a retail price listed as $755 higher than its 2011 equivalent, for example, doesn't mean that's what consumers are paying.

What the data do show is the possibility that, when purchased under CPO programs, some used vehicles in high demand might represent a poor value relative to comparable new ones. And especially with reliable cars, paying extra money for the extended warranty might not make sense, Bartlett says.
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Old 03-10-2011, 01:32 PM   #2
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10. Toyota Land Cruiser (4WD)

Click to enlarge picture
Toyota Land Cruiser




  • 2009 retail extra clean: $68,025
  • 2011 retail equivalent: $69,503
  • Difference: $1,478
  • 5-year cost of ownership: 11 percent higher for 2009 model
The Toyota Land Cruiser is part of a dying breed of large, truck-based SUVs. Given the hoopla over downsizing and fuelefficiency, demand for this behemoth seems counterintuitive. But like many models on this list, the Land Cruiser is a low-volume vehicle, and with fewer to go around, prices of used models remain robust.
Read: Should You Lease Your Next Car?
9. Toyota FJ Cruiser

Click to enlarge picture
Toyota FJ Cruiser




  • 2009 retail extra clean: $31,125
  • 2011 retail equivalent: $32,188
  • Difference: $1,063
  • 5-year cost of ownership: 23 percent higher for 2009 model
The Toyota FJ Cruiser is the Land Cruiser's more affordable little brother. It, too, is a burly truck-based SUV built for serious off-road driving. Also like the Land Cruiser, the FJ is not a high-volume model and never has been, which accounts for the strong price of the 2009 model.
View Pictures: 2010 Toyota FJ Cruiser
8. Dodge Challenger R/T

Click to enlarge picture
Dodge Challenger R/T




  • 2009 retail extra clean: $31,075
  • 2011 retail equivalent: $31,490
  • Difference: $415
  • 5-year cost of ownership: 19 percent higher for 2009 model
  • Incentives: $1,000 cash
With $1,000 cash back, the 2011 Challenger is a screaming deal and could cost $585 less than a 2009 CPO model. Once again, this is an example of lower supply driving prices up on used models: Dodge produces fewer Challenger muscle cars relative to other mainstream models. The R/T trim forgoes the standard V6 engine in favor of a more potent HemiV8. But it isn't as expensive as the top-of-the-line SRT8 model, which has an even more powerful engine.
Compare: Dodge Challenger vs. Ford Mustang vs. Chevrolet Camaro
7. Volkswagen Jetta S

Click to enlarge picture
Volkswagen Jetta




  • 2009 retail extra clean: $16,850
  • 2011 retail equivalent: $17,160
  • Difference: $310
  • 5-year cost of ownership: 4 percent higher for 2009 model
  • Incentives: $750 cash in most regions
Volkswagen, criticized in recent years for what some view as excessively high prices for mainstream cars, is making an effort to offer more bang for the buck. The significantly updated 2011 Jetta reflects that new strategy. The Jetta S is the base trim level. Styling inside and out is noticeably different from the previous version. A $750 cash bonus makes the 2011 model even more attractive than a 2009 CPO.
Watch Video: 2011 Volkswagen Jetta
6. Nissan Versa (Sedan A/T)

Click to enlarge picture
Nissan Versa




  • 2009 retail extra clean: $13,200
  • 2011 retail equivalent: $13,267
  • Difference: $67
  • 5-year cost of ownership: 10 percent higher for 2009 model
The Versa is one of Nissan's most affordable models. The sedan listed here, which includes the popular automatic transmission at an extra cost, is generally less expensive than the available 5-door hatchback. The Versa is surprisingly comfortable and accommodating for its size, but its fueleconomy is mediocre.
Bing Images: Nissan Versa
Nissan cube

Click to enlarge picture
Nissan cube




  • 2009 retail extra clean: $15,225
  • 2011 retail equivalent: $15,270
  • Difference: $45
  • 5-year cost of ownership: 10 percent lower for 2009 model
The Nissan cube is another low-volume niche vehicle. Think of it as a jazzed-up Versa that is nimble, versatile and fun to drive. Models like the cube, which put a premium on style, can go either way in terms of value, depending on consumers' whims and current fads. Right now, small crossovers are hot, and that helps boost the value of used cubes. Notably, the cube is the only model on the list whose 2009 model has a lower ownership cost than the equivalent 2011 model.
Read: Small on the Outside, Big on the Inside
4. Toyota Tundra (Double Cab 2WD 4.6L V8)

Click to enlarge picture
Toyota Tundra Double Cab




  • 2009 retail extra clean: $27,625
  • 2011 retail equivalent: $27,484
  • Difference: $141 more for the used model
  • 5-year cost of ownership: 17 percent higher for 2009 model
  • Incentives: $2,250 to $3,000 cash in most regions
Who would have thought, in this era of environmental consciousness, that a full-size, gas-guzzling pickup would maintain its value as well as the Toyota Tundra? Part of that is because it's a Toyota recalls be damned, people love and trust them. The version listed here is the versatile Double Cab, with 2-wheel drive and a V8engine. When factoring in the healthy cash-back incentive, a new Tundra could cost over $3,000 less than a comparable 2009 model.
Bing: Toyota Tundra Accessories
3. Toyota Tacoma PreRunner (Double Cab 2WD V6 A/T)

Click to enlarge picture
Toyota Tacoma Double Cab




  • 2009 retail extra clean: $26,375
  • 2011 retail equivalent: $26,099
  • Difference: $276 more for the used model
  • 5-year cost of ownership: 13 percent higher for 2009 model
  • Incentives: $500 cash in Chicago region
The Tacoma is Toyota's smaller pickuptruck. The most popularly equipped model, according to Black Book, is the Double Cab with 2-wheel drive, much like the Tundra only with a V6 engine instead of a V8. Forgoing 4-wheel drive is a nod to cost savings. Toyota's solid reliability means that the added assurance of an extended warranty might be unnecessary.
Watch Video: 2011 Toyota Tacoma
2. Audi Q5 3.2 (Premium S Line)

Click to enlarge picture
Audi Q5




  • 2009 retail extra clean: $46,175
  • 2011 retail equivalent: $45,555
  • Difference: $620 more for the used model
  • 5-year cost of ownership: 17 percent higher for 2009 model
  • Incentives: $1,500 cash for existing Audi owners
The Q5 is the smaller of Audi's two crossovers. With a $1,500 cash incentive, you could wind up paying $2,120 less for a new one than for a 2009 CPO model. The version noted here is one rung short of top-shelf: It comes with the V6 engine and most of the bells and whistles, including an S Line trim package that ads trick wheels and other styling tweaks.
Compare: Audi Q5 vs. BMW X3 vs. Lincoln MKX
1. Toyota Venza (FWD 4-cylinder)

Click to enlarge picture
2009 Toyota Venza




  • 2009 retail extra clean: $28,650
  • 2011 retail equivalent: $27,895
  • Difference: $755 more for the used model
  • 5-year cost of ownership: 24 percent higher for 2009 model
The Toyota Venza represents a new niche within a niche, which makes it particularly trendy. It's a crossover that is more wagonlike than many previous offerings, much like the Honda Accord Crosstour and BMW 5-Series Gran Turismo. Compared with those two, the Venza is less exciting, at least in terms of driving dynamics. But then most people probably don't buy a Toyota for the fun factor; they buy it for the safety, reliability and value.
Bing Videos: Toyota Venza
Matthew de Paula wanted to be an automotive journalist ever since reading his first car magazine in grade school. After a brief stint writing about finance, he helped launch ForbesAutos.com and became the site's editor in 2006. Matthew now freelances for various outlets.
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Old 03-10-2011, 02:47 PM   #3
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:facepalm:
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Old 03-10-2011, 11:08 PM   #4
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Uhh... shouldn't cash on the hood presently hurt the value of a certified pre-owned model? Cars are only worth what people will pay for them. After your Tundra that you have listed near the new price of a 2011 model doesn't sell for 6 months, you'll drop the price or keep the truck. I 2nd owace.
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Old 03-10-2011, 11:22 PM   #5
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Originally Posted by quentinberg007 View Post
Uhh... shouldn't cash on the hood presently hurt the value of a certified pre-owned model? Cars are only worth what people will pay for them. After your Tundra that you have listed near the new price of a 2011 model doesn't sell for 6 months, you'll drop the price or keep the truck. I 2nd owace.
I think that you're just bitter cause you own the only Toyota not on the list... .
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Old 03-10-2011, 11:49 PM   #6
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I think that you're just bitter cause you own the only Toyota not on the list... .
did you not notice the other 3 toyota's on the list? haha
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Old 03-11-2011, 12:04 AM   #7
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Originally Posted by daveyboy

I think that you're just bitter cause you own the only Toyota not on the list... .
At first glance I don't think I'd want to be on the list. Deeper thought makes me think I'd want it there. It means people will basically pay new prices for your used car.

I love my T4R. Best vehicle I've ever owned.
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Old 03-11-2011, 02:31 AM   #8
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Current gen Tundras are pretty cheap used, I call BS on their TMV numbers.
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Old 03-11-2011, 10:29 AM   #9
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This title could easily read, "Which vehicles hold their value the best"
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Old 03-14-2011, 11:23 PM   #10
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Originally Posted by SCRAPPYDO View Post
This title could easily read, "Which vehicles hold their value the best"
but they decided to go for a very confusing and counter intuitive title instead...

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Old 03-15-2011, 10:36 AM   #11
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Not really, it's trying to point out 1 year old CPO prices versus new. MINI always shows up on the list for holding it's value so the list wold have been different.
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Old 03-15-2011, 11:52 AM   #12
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worst CPO value, or best new purchases?
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Old 03-15-2011, 01:35 PM   #13
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Quote:
Originally Posted by SCRAPPYDO View Post
This title could easily read, "Which vehicles hold their value the best"
Quote:
Originally Posted by Ghosthound View Post
but they decided to go for a very confusing and counter intuitive title instead...

I don't think it's that counter intuitive, and slightly different from "which vehicles hold their value". because of cost of ownership, how much extra each company charges for CPO, and other factors, it isn't just holding value.

It could also be "Which cars are discounted the most when new?"

I wonder how different this report would have been in other years. say 2008 new versus a 2 year old 2006 model.

I'd also like to know how some of these would fare against a non-CPO car with an extra warranty, depending on how much the extended warranty costs. my car wasn't CPO, but the warranty (which i actually used and found absolutely worth it) plus the deal i got still made the car cost effective.
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Old 03-15-2011, 10:47 PM   #14
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The problem is without actual transaction prices, the data is meaningless. Sure you can price an 09' CPO about the same as a new 11', but who in their right mine is going to pay that. The numbers they use aren't really relevant to much of anything.
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Old 03-16-2011, 02:05 PM   #15
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The problem is without actual transaction prices, the data is meaningless. Sure you can price an 09' CPO about the same as a new 11', but who in their right mine is going to pay that. The numbers they use aren't really relevant to much of anything.
Welcome to these top 10 blah blah blah articles. It's all fluff to fill a gap in a magazine or blog.
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Old 03-16-2011, 02:25 PM   #16
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if your 09 is still worth close to an 11 brand new, then you bought a good car that is holding its value. This article is retarded
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Old 03-16-2011, 10:31 PM   #17
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Originally Posted by lowrider89 View Post
if your 09 is still worth close to an 11 brand new, then you bought a good car that is holding its value. This article is retarded
sounds like you misunderstood the article... these are CPO prices, not trade in value. for example your vehicle could have lost $5k in 2 years but CPO happened to increased it by $4k so its only $1k less than new. also in reality your trade in value of your 2-yr old ride is actually $8k less than new because dealerships adds $3k on top of the $5k depreciation.
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