Questionable Response on Certified Pre Owned Question

[Champ324]

Two weeks ago I bought my fifth Volvo, a 2012 XC70 with under 34,000 miles on it from a local dealership. I was also encouraged to purchase an extended warranty with Zurich for $4,400. The vehicle had one owner, a lessee who'd gotten it from a different dealership whose service manager stated that he/she diligently met the scheduled maintenance requirements.

A couple days later I did some additional research and asked that the Zurich policy with the current dealership be cancelled and my car covered under the Volvo 7 year, 100,000 mile CPO warranty.

The general manager responded with a lengthy e-mail explaining that only a few pre-owned Volvos qualify for Certified status, and that designation cannot be applied retroactively, and certainly not after it has been sold. Regrettably, I think the point he makes is defensible.

However, having been somewhat suspicious of dealerships, I can't help but wonder if the reason my new purchase does not qualify as a CPO is because they discovered a significant mechanical issue that likely will fail before the CPO warranty period ends.

Probably just paranoid, but over the years I've learned much from this forum; I appreciate any insights and opinions.

[brentcd]

In my experience, making a car CPO entails a more thorough inspection in the shop, and the cost of the extended warranty from the manufacturer. I have seen and heard of cases where a red flag in the shop or the car's history causes them to skip that step, and I have seen some dealers who skip that to keep asking prices lower and more competitive. I'm sure your car was the latter scenario.
A lot of times, within a short period, these warranties can be added, but perhaps not for a CPO if the original inspections weren't completed fully.
I would say you were smart to drop their aftermarket warranty, those are simply for-profit insurance policies. I tell people to take the same amount of money and put it in a savings account if they're concerned and use that account for repairs - they'll certainly come out ahead.
Privacy concerns can be complicated, but the original dealership should be more than able to pull up your VIN now that you own the car and show you their records for maintenance and any repairs.

[phlegm]

...
I would say you were smart to drop their aftermarket warranty, those are simply for-profit insurance policies. I tell people to take the same amount of money and put it in a savings account if they're concerned and use that account for repairs - they'll certainly come out ahead.
...

Love this approach, and completely agree.

One caveat though: I would expect that on average, one should come out ahead. There's still the chance that you encounter extremely costly repairs. However, that's the very nature of "insurance".

[Champ324]

In my experience, making a car CPO entails a more thorough inspection in the shop, and the cost of the extended warranty from the manufacturer. I have seen and heard of cases where a red flag in the shop or the car's history causes them to skip that step, and I have seen some dealers who skip that to keep asking prices lower and more competitive. I'm sure your car was the latter scenario.
A lot of times, within a short period, these warranties can be added, but perhaps not for a CPO if the original inspections weren't completed fully.
I would say you were smart to drop their aftermarket warranty, those are simply for-profit insurance policies. I tell people to take the same amount of money and put it in a savings account if they're concerned and use that account for repairs - they'll certainly come out ahead.
Privacy concerns can be complicated, but the original dealership should be more than able to pull up your VIN now that you own the car and show you their records for maintenance and any repairs.

Your response makes eminently good - and practical - sense. Thank you for taking time to compose it. Per your helpful suggestion, because I am a borderline neurotic on taking care of these cars, I intend to connect again with the original dealership regarding their maintenance/repair records.

Still not sure about the extended warranty - on my 2004, which was my hands-down favorite, in the five years I owned it, excluding routine service issues, I probably spent about the same as the warranty costs.

[brentcd]

One would hope in all averages it would work that way, if it did the 'warranty' company would go out of business. They can't possibly afford to pay out more than half or two-thirds what they take in, when you account for overhead.
I wish they would define a 'warranty' as what a manufacturer of a product offers for anything they screwed up in assembly. Anything else is an insurance policy.
I have heard of instances going both ways but it is a little like a casino in Vegas. They are obviously 'for-profit' on a much larger scale.

[phlegm]

One would hope in all averages it would work that way, if it did the 'warranty' company would go out of business. They can't possibly afford to pay out more than half or two-thirds what they take in, when you account for overhead.
I wish they would define a 'warranty' as what a manufacturer of a product offers for anything they screwed up in assembly. Anything else is an insurance policy.
I have heard of instances going both ways but it is a little like a casino in Vegas. They are obviously 'for-profit' on a much larger scale.

I think we're saying the same thing. The warranty provider is banking that the average purchaser will not need repairs valued even close to the policy cost. This ensures a valid business model.