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General Motors Corp. has developed GM Certified to help its dealers in the lucrative used-car market.

But dealers aren't flocking to the GM flag-so far.

By early March, about 450 GM dealerships have enrolled in the GM Certified program since it began in the fall. GM says the number is respectable and will grow.

Saturn and Cadillac dealers have their own used-car programs and aren't part of the program.

$2,500 FEE TO JOIN

Dealers pay a $2,500 fee to join the program and annual fees ranging from $500 to $1,500, depending on the dealership's size. They conduct a GM-mandated inspection of a vehicle, make repairs if necessary, and advertise it as "GM Certified."

GM says its name will lend credibility to the certified vehicles and give dealers another tool to compete against used-car superstores, such as CarMax.

According to GM research, 54% more for a used vehicle certified under a manufacturer program compared with a non-certified vehicle.


However, many dealers say the GM program is expensive. They prefer their own used-car certification programs, often backed by independent warranty companies.

"I'm not going to pay GM $2,500 for something that we're doing ourselves," says Peter Lichtenberg, owner of Lichtenberg Buick Mazda in Ozone Park, N.Y.

Besides the enrollment fee, dealers also pay GM a warranty fee, typically rolled into the selling price, which many dealers say is too high. The fee ranges from $285 to $500.

Certified vehicles receive 12-month, 12,000-mile warranties providing broad coverage. Eligible vehicles must be no more than three model-years old and have fewer than 60,000 miles.

Mr. Lichtenberg says he has worked hard to build the reputation of his dealership's used-car sales. He typically offers a 12-month, 12,000-mile warranty on used vehicles. Moreover, the $2,500 enrollment fee, he says, doesn't indicate that GM wants to build a sense of partnership with dealers.

Vyletel Buick, in Sterling Heights, Mich., did enroll in the program.

"We're selling the GM name," says Don Gianfermi, the dealership's used car manager. "It gives people peace of mind."


Ed Lechtzin, GM's director of brand and product publicity, says many dealers are waiting for national advertising to kick in this fall to enroll.

Mullen Advertising, Wenham, Mass., was selected in January to handle the account. The agency will also create the program's consumer marketing plan.

Some dealers object to GM's suggestion that dealers adopt limited haggling on GM Certified cars. Ken Nieman, who owns City Chevrolet in San Diego, says his neighboring Chevrolet dealers objected to GM Certified because they didn't want to adopt low-haggle selling on used cars. But he enrolled happily because he sells all his cars, new and used, with limited haggling.

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