Mercedes Promotes Sales of Its Used Cars

By Douglas A. McIntyre Published Jun 14, 10:10AM EDT

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Why would a car manufacturer promote sales of previously owned versions of its vehicles when its primary goal is to sell new ones? It is a very good question, and one that pertains to the Mercedes effort to get consumers to buy what it calls “Certified Pre-Owned” versions.

Mercedes has given potential customers a handful of strong reasons to buy its used cars. First among these is that the vehicles receive rigorous testing. This includes complete tests of the engine, drive train, electrical systems and outside appearance. Those things are not much beyond what most smart people would ask a dealer to do with a used car. Mercedes’ primary point about these reviews rests on the fact that the work is done by Mercedes mechanics at Mercedes dealers.

Mercedes does stand by the work of its mechanics and the overall quality of the cars before inspection. The warranties for these used vehicles often include unlimited mileage. Mercedes also offers prepaid mechanic service and 24/7 personal roadside assistance.

Mercedes offers two other services to sell its used cars. First is special financing packages that often run as long as 66 months. The interest rates vary and are as low as 1.99% for the company’s E-Class. And, finally, what would all these programs be worth if Mercedes did not help potential customers to find a dealer and search its inventory. So, it provides an online means to do so.

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None of this tells why Mercedes goes to all the trouble. One reason is that it may be doing work on the part of its dealers. These dealers often make large margins on used cars. And Mercedes dealers do not want to compete with other outlets that sell them as well. By controlling supply, particularly via offering special services, Mercedes drives buyers toward their dealers, and not away from them. If the “Certified Pre-Owned” program is nothing else, it is a tool to improve dealer relations.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.