Save money and drive a late-model BMW. It's an appealing prospect that's possible through BMW's certified pre-owned (CPO) program. Officially called BMW Certified by the manufacturer, the program offers a wallet-preserving way to buy a newer BMW.
Depreciation on a brand-new Bimmer can be painful. According to Edmunds, a typical BMW 3 Series will lose about 40% of its value during the first three years of ownership. Over five years, loss of value rises to 62%. It gets worse for 5 Series owners, with an average model losing 44% of its value over the first three years. Depreciation hits 66% over five years. If you think that's excruciating, consider that a new X5 will lose about $775 in value PER MONTH during the first year.
BMW Certified is appealing because its CPO cars have already taken the depreciation hit and still benefit from a manufacturer-backed warranty. Let's look at how BMW's CPO program works.
BMW Certified Pre-Owned Explained
BMW requires its CPO vehicles to be less than six years old and have fewer than 60,000 miles. These cars are sourced from end-of-term leases, trade-ins, auction purchases, service loaners, and BMW company cars. Candidate CPO cars must be accident-free and have a clean vehicle history.
Rather than market a specific number of inspection points, BMW calls its CPO evaluation process a "360-degree" evaluation. This terminology sounds more comprehensive, but every BMW technician conducting a CPO review uses the same four-page checklist. The main inspection areas include:
- Vehicle History and Maintenance Record
- Condition of Wheels and Tires
- Body Condition Including Fit and Finish
- Function of Mechanicals
- Road Test Including Assessment of Systems While Stationary and During Driving
Following a successful inspection, the BMW dealer pays the automaker a fee to add CPO coverage to the vehicle.
BMW Certified Pre-Owned Warranty And Benefits
The BMW Certified program adds one year of unlimited-mileage coverage to the vehicle's original 4-year/50,000-mile new car warranty. Additional protection can be purchased to extend the CPO warranty.
While BMW's new car warranty offers bumper-to-bumper coverage that pretty much covers everything that isn't affected by wear and tear, its CPO coverage offers different terms. Major components are still covered, but things like batteries, headlight bulbs, brake pads, squeaks, and rattles are excluded. Of course, on a BMW, these little things can still be expensive. The dealer can provide you with a list of specific warranty exclusions.
Other BMW Certified benefits include roadside assistance, BMW assist--the company's telematics program, and service loaners. These extras last the length of the warranty coverage. You can transfer existing CPO coverage to a subsequent buyer for a $200 fee.
Lastly, BMW has a good CPO leasing program, leading to lower monthly payments than a traditional car loan.
What To Consider When Buying A BMW CPO Car
- Vehicle Age: CPO cars tend to be two to four years old, so the BMW you consider may not be the current body style.
- It's Not New: BMW CPO vehicles are used cars, so new-car lemon laws won't be in effect. Depending on where you live, other consumer and used-car purchase laws may apply.
- Limited choices: The supply of BMW Certified cars is not limitless, and unlike a new car, you can't order one to your exact specifications. You may have to forgo specific options or color choices.
- Wear And Tear: A BMW CPO vehicle may have some minor interior or exterior blemishes--after all, it's not a brand-new car. Also, there's a very good chance that the BMW you are considering may have its original tires and brakes, which could need near-term replacement. Keep this in mind when negotiating with the dealer.
The Perfect CPO BMW To Buy
Let's look at some popular BMWs and suggest "sweet spot" model years to consider. As a general rule, I'd recommend skipping the first year of any all-new BMW to avoid potential gremlins. The prices referenced here are general ranges based on current pricing on BMW's CPO website. Prices can vary based on equipment, availability, and location. BMW's new car warranty coverage ends at 50,000 (or four years from the first in-service date, whichever comes first). Be sure to pay attention to this as you explore BMW Certified vehicles.
For 2019, BMW introduced an all-new 3 Series (G20), so if you consider getting the company's best-selling sedan, look at the 2020 model year (remember, skip the first year of an all-new Bimmer). You'll find 330xi models with an original sticker of around $50,000 selling in CPO form for about $33,000. If you are looking for bigger savings and don't mind driving an earlier 3 Series (F30), check out a 2018 model. You’ll find 330xi models under $26,000. The somewhat underpowered 320i can be found for about $20,000.
Bigger depreciation can mean bigger savings, as BMW's larger sedans are notorious for costly drops in vehicle value. The all-new G30 version was launched in 2017, so begin your search with 2018 models. You’ll find plenty of 530xi editions selling for $32,000-$34,000 with original stickers in the $60,000-$64,000 range. That's almost half off for a three-year-old BMW with about two years of warranty coverage. Sweet!
The all-new 4 Series (G22) was launched for the 2021 model year, so CPO savings exist with the previous generation (F32). Looking for 2019-2020 models will yield excellent pricing while including several years of warranty coverage. For example, you can find a 2019 430i xDrive Gran Coupe for around $31,000 that initially stickered for $51,000.
SUVs, or SAVs in BMW-speak, are in demand, so depreciation is lower and selling prices are higher. That said, buying a CPO X3 can still save money. Look for a 2019 model (the G01 was redesigned for 2018)--an xDrive30i with an original sticker of $52,000 goes for about $37,000. Go for the previous generation (F25), and you'll spend $29,000 for a 2017 X3 that sold for $52,000 when new.
CPO deals for the latest X5 (G05) will be hard to find since the model was redesigned for 2019. You can find some 2020s selling for around $57,000 from an original $68,000--no great bargain. Shop for the prior generation X5 (F15), and you can grab a 2018 model that initially sold for $65,000 for about $38,000.