What is a certified pre-owned car?

The biggest tension for most car buyers in their decision-making process comes down to upfront cost vs. reliability. For example: is it better to pay top dollar for a new vehicle, and (hopefully) not have to worry about unexpected breakdowns and repair bills? Or is it better to buy a car on the cheap, even if its reliability is suspect?

In many cases, late-model used car options strike a balance between these two factors. If you go this route, you’re not paying as high a price as you would for a brand-new model, but you’re also not taking as big of a risk as you would with a car that’s over 10 years old (or older).

The question is, with so many vehicles to choose from, how can you tell whether the late-model used car you’re looking at isn’t a lemon? This is where certified pre-owned cars come into the picture.

What are CPO Cars?

Back in the 90s, a few auto manufacturers developed certified pre-owned (CPO) programs to make some extra profit off of lease returns and low-mileage trade-ins. Instead of sending these used cars (many of which were in great condition) off to auctions, these automakers decided to inspect, recondition, and resell the vehicles on their own. This trend caught on, and now virtually every major car manufacturer has some kind of CPO program in place.

So what’s the definition of a certified pre-owned car? According to Edmunds.com, “a certified pre-owned (CPO) vehicle is a late-model used car that has gone through a thorough inspection and reconditioning and has been given a factory-backed limited warranty.” So if you purchase a certified pre-owned vehicle, you can gain some extra peace of mind, knowing that it should be in good condition, and is under warranty (at least for a while).

How Expensive is a CPO Car?

Certified pre-owned vehicles are generally less expensive than brand-new cars, but more expensive than non-certified used vehicles. The difference in cost between a certified and non-certified pre-owned vehicle comes down to 4 basic factors:

• Inspection. Any certified pre-owned vehicle is subject to a comprehensive inspection that can cover literally hundreds of points.
• Reconditioning. After the inspection has been completed, technicians will start a reconditioning process. This could include both mechanical and cosmetic reconditioning. Depending on the condition of the vehicle when it was returned to the dealer. 
• Warranty. Just about any certified pre owned vehicle comes with a manufacturer-backed (or sometimes dealer-backed) warranty. 
• Extras. If you buy a CPO vehicle, you may have the option of purchasing extra features and amenities along with it. For instance, some CPO cars come with a free maintenance program (at least for the first year). Free roadside assistance, and access to a free loaner vehicle when the car is in the shop.

Of course, no matter what features a certified pre-owned car comes with, you should still pursue the best possible price. Just as many buyers can negotiate a price that’s equal to or lower than a new car’s MSRP, you can and should see if there’s any wiggle room for the dealer to part with their CPO vehicle for lower than the sticker price.

The Two Types of CPO Programs

Certified pre-owned programs vary quite a bit from manufacturer to manufacturer. Each automaker’s inspection and reconditioning process is somewhat different, and the warranties and extras they offer are diverse as well. However, most (if not all) CPO programs fall into one of two categories: non-luxury and luxury.

Non-luxury automakers have strict requirements that a used car must meet to qualify for their CPO program. In many cases, luxury CPO programs are a little bit stricter. For example, all vehicles that are 8 years old or newer and have less than 90,000 miles on their odometer may be eligible for a non-luxury manufacturer’s CPO program. In contrast, a luxury manufacturer may set the cutoff line at 6 years and 70,000 miles. Again, the details will vary from one automaker to the next.

Are All CPO Cars Certified By Their Manufacturer?

The short answer to that question is No. The reason why this is the case is that some dealerships have their CPO programs, with benefits that are very similar to those offered by the automakers themselves (e.g., a 1-year/12,000-mile bumper-to-bumper warranty, or 1 year of free roadside assistance).

While a dealer’s CPO program may be very beneficial, it’s important to note that any CPO program not originating with the manufacturer won’t come with a manufacturer-backed warranty. In addition, dealerships may have less robust certification standards than the automakers do, which means that you may be more likely to get a “clunker” from them than you would from one of the major manufacturers.

Should You Buy a CPO Car?

That depends on what you’re looking for, what your budget is, and what the features of the CPO program you’re exploring are. Here are some things to consider as you do your research:

• Certified pre owned vehicles come with a higher price tag than non-certified used cars. When you buy a CPO vehicle, you’re paying a higher upfront price for the comprehensive inspection, the thorough reconditioning, and the warranty that comes with it. The trade-off is that you hopefully won’t have to pay as much for maintenance and repairs down the road.
• CPO vehicles are within a certain age range. Vehicles that are 10+ years old probably won’t qualify as certified pre-owned cars. Of course, the newer a used car is, the less likely that it will break down unexpectedly.
• Each CPO program offers different features and benefits. It’s important to understand exactly which add-ons you can buy for a CPO vehicle, and whether there are any features you can remove from your purchase in order to lower the overall price. This will also allow you to compare different CPO programs, and find the one that would work best for you. For instance, one program may offer a free loaner vehicle for when your car needs repairs, while another one doesn’t.

In conclusion, buying a certified pre-owned car can be a great solution for you if you want reliable transportation at a reasonable cost. No matter what your needs are, our team at AutoSwiftly can help you to find the right car at the right price – without the stress of handling negotiations on your own! Apply with us today to get the process started.

Recommended reading: Compared to a Certified pre-owned (CPO) vehicle, does leasing to own make more sense?