by Hal Mattern
Car dealers have been selling certified pre-owned vehicles for years, giving buyers the choice of acquiring late-model autos with warranties and other incentives designed to ensure that they are almost as good as new. Such vehicles cost more than regular used cars, but still far less than new models.
Now motorcoach manufacturers are getting in on the trend, offering various versions of certified pre-owned programs designed to attract buyers looking for quality late-model coaches that can cost a couple hundred thousand dollars less than brand-new buses.
They offer some combinations of multi-point inspections, 60- to 90-day warranties, parts and service credits and optional extended warranties on engines and transmissions.
Most certified motorcoaches are fairly new, usually not more than five or six years old, and generally sell for at least $10,000 to $20,000 more than used coaches sold as-is with no warranty.
“Customers are looking for peace of mind, and that’s what we are giving them with our certified program,” said Guillaume Charron, director of pre-owned coach sales for Prevost, which began offering certified pre-owned motorcoaches in March.
Certified Prevost coaches undergo 250-point detailed mechanical inspections. Any mechanical problems are fixed, tires are replaced, aluminum wheels are added if they aren’t already installed, HVAC systems are serviced and diesel particulate filters are cleaned.
Prevost also conducts any bodywork and painting required and completely cleans the interiors of the coaches. The company also offers an optional extended warranty covering engines and transmissions.
ABC Companies and Temsa also began offering certified pre-owned programs this year, while Motor Coach Industries launched a similar program nine years ago, making it a pioneer in the certified coach market.
MCI’s program, called Select+, offers a 210-point inspection and a 60-day, 30,000-mile limited warranty with preventative-maintenance inspections during the warranty period. The company’s standard 24/7 emergency roadside assistance is also included.
ABC launched its certified pre-owned motorcoach program during this year’s UMA Motorcoach EXPO. It includes an 80-point inspection covering the interior and exterior of the coach as well as mechanical parts.
Instead of a warranty, the company offers a parts and service credit totaling 1 to 1.5 percent of the vehicle’s sale price.
Temsa was in the process of launching its certified program in July and expected it to be up and running in August. The program includes a 103-point inspection, a 90-day limited warranty that could eventually be increased to 180 days and an optional third-party extended warranty.
Temsa, a Turkish manufacturer, opened Temsa North America a year ago to sell its motorcoaches after the company cut ties with CH Bus, which had distributed the coaches in the U.S. for eight years. The companies are still entangled in a legal dispute.
“We’re kind of a start-up, and we are trying to offer customers new, creative ways to get into pre-owned coaches,” said Andy Byars, pre-owned sales manager for Temsa North America.
Getting customers into pre-owned coaches is the goal of all four companies, especially in a market hurt by fewer new operators entering the industry and existing ones forced out of business. Small new and existing operators tend to buy used coaches because they can’t afford new ones.
Sales of used motorcoaches declined by 18.4 percent in 2018 compared with 2017, according to the American Bus Association Foundation, which tracks new and used bus sales quarterly.
There has also been price pressure in the used market because of a glut of used buses selling for discounted prices, which can drag down resale and trade-in values. Silverado Stages of Phoenix went out of business, resulting in about 300 used coaches being put up for sale. MCI, which stopped distributing Setra coaches at the end of 2017, was left with 80 of the luxury buses to sell in 2018.
“Everybody was selling them cheap,” said Byars of Temsa. “They were giving them away, sometimes for as little as 30 or 40 cents on the dollar.”
The market appears to have improved more recently. The latest ABA sales report found a 16.8 percent increase in used coach sales during the first quarter of this year compared with the same period in 2018.
“The first quarter was good for us,” said Michael Apple, vice president of pre-owned coach for MCI. “The market is up from last year.”
Thom Peebles, vice president of marketing for ABC, said the company also is seeing increased activity in the pre-owned coach market.
“We’ve seen a pretty steady demand,” Peebles said. “Trade-ins are coming in and going out quickly. Some are sold before they even get here.”
Charron of Prevost said the company has experienced an increase in sales of Volvo coaches to limousine companies expanding into the motorcoach industry.
“The limo market is picking up,” he said. “They are buying both new and pre-owned coaches.”
It is still too early to gauge how sales of certified pre-owned motorcoaches are affecting the used market because most of the companies have been selling them for less than a year. But it is clear what types of customers prefer certified coaches.
Operators that don’t have extensive service capabilities are more likely to choose certified pre-owned coaches that have late-model amenities and that don’t require repairs or upgrades. Operators with large service departments and skilled mechanics tend to focus more on lower-priced coaches they can fix or refurbish themselves.
Other certified customers include operators with newer fleets who might need to add an additional coach or two because business picked up but who don’t want to buy new ones.
“A certified coach can fold into their fleet and not look like the odd man out,” said ABC’s Peebles.
The certified pre-owned market is an outgrowth of the challenge motorcoach operators face keeping their costs down while still adding quality late-model coaches to their fleets.
“A big segment of our customers likes certified coaches because they are ready to go,” said Apple of MCI. “They don’t need any additional work and they provide an increased comfort level for customers.”