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What Is a Certified Pre-owned Vehicle and Should I Buy One?

certified pre-owned

“Certified pre-owned” is not just a nice term for “used.” While a car salesperson can tell you a vehicle has been “gently loved” all they want to, the term certified pre-owned (CPO) is an official designation. It will influence a car’s price, its warranty and the APR you may be able to get for it in an auto loan.

Here, we’ll go over how a certified pre-owned vehicle is different from a used car, whether one could be worth it and where to find them.

What does certified pre owned mean?

How is a certified pre-owned car different from a used car?

Where can you get a certified pre-owned car?

Should you buy a certified pre-owned car?

What does certified pre-owned mean?

A certified pre-owned vehicle is a used car that is inspected, approved and warranted, all by the original manufacturer, before it is offered for sale again. Basically, people who know what they are doing can officially say, “this car is good.”

Certified pre-owned requirements

In general, certified pre-owned cars must have little wear and tear, be less than six years old and have less than 80,000 miles. Each car manufacturer has its own specific requirements, however, and some are more stringent than others. For example, Acura CPO cars must have less than 80,000 miles, but Chevrolet CPO cars must have less than 75,000 miles on the odometer.

Certified Pre-owned Qualifications
Manufacturer Younger than Has less than
Acura 6 years 80,000 miles
Chevrolet 6 years 75,000 miles
Ford 6 years 80,000 miles
Honda 6 years 80,000 miles
Lexus 6 years 70,000 miles
Porsche 8 years 100,000 miles
Toyota 6 years 85,000 miles
Volvo 5 years 80,000 miles

 

Certified pre-owned inspections

If a vehicle qualifies based on age and mileage, it can then go through the inspection process. Many manufacturers require that it pass both a history report check and an actual inspection by a manufacturer-certified technician.

The actual inspection usually requires that the technician check more than 100 points on the vehicle, replacing any parts as needed.

How is a certified pre-owned car different from a used car?

All certified pre-owned cars are used cars, but not all used cars are certified pre-owned. Not all used cars pass the qualifications and inspections.

Some manufacturers will sweeten the deal by including free maintenance. Lexus, for example, includes two years/20,000 miles worth of maintenance with each CPO car. They also usually come with an extra warranty.

Certified pre-owned extra warranty

Certified pre-owned cars generally have an extra warranty given by the manufacturer. Many manufacturers tack on an additional 1-year, 12,000-mile basic, bumper-to-bumper warranty onto the remaining original warranty that came with the car.

For example, every new Ford vehicle comes with a 3-year, 36,000-mile basic warranty. A Ford CPO car has an additional one year and 12,000 miles added to that. So the maximum time and miles a Ford CPO car is under warranty is four years, 48,000 miles from the day the car was originally bought by the first owner. In terms of basic warranty, a plain used Ford only has the original 3-year, 36,000-mile basic warranty.

Certified Pre-owned Total Basic Warranty
Manufacturer Maximum time Maximum distance
Acura 5 years 62,000 miles
Chevrolet 4 years 48,000 miles
Ford 4 years 48,000 miles
Honda 4 years 48,000 miles
Lexus 6 years unlimited
Porsche 6 years 100,000 miles
Toyota 4 years 48,000 miles
Volvo 7 years 100,000 miles

You often have the option to buy an extended warranty beyond what the included certified pre-owned warranty covers.

Decreased APR

Because the vehicle is certified and comes with a warranty, auto lenders usually see CPO cars as less risky. The car is less likely to break down any time soon, and if it does, the longer warranty will probably cover the cost of repairs. The lender doesn’t have to worry that you, the borrower, will need to choose between making the monthly car payment or paying the repair bill.

Lenders adjust APRs according to risk. Certified pre-owned vehicles can qualify for lower APRs than regular used cars, although the APR may still be higher than that for a new car.

Increased price

All of the benefits of a CPO car don’t come for free. The main appeal of certified pre-owned cars is that they are less risky. Therefore, they are worth more that a non-certified used vehicle. Industry guides like NADAguides and KBB, which you can use for free to find the actual value of a vehicle, have three pricing options for cars: new, CPO and used.

Car dealerships aren’t in the habit of giving away anything for free, 100-point inspections or otherwise. The increased price of a CPO car helps to cover the inspections and the extra warranty. If you want to play around with what your monthly payment would look like as you research cars, you can use this monthly auto payment calculator.

Where can you get a certified pre-owned car?

You can only get a certified pre-owned car from a dealership of the same car brand. For example, if you want a Lexus CPO vehicle, you have to go to a Lexus dealership. You can’t get a Lexus CPO from a Porsche dealer.

This is because the car’s original manufacturer has to inspect, approve and warrant the car, not some other manufacturer or a used car dealer.

Should you buy a CPO car?

There is a trade-off between paying the higher price and having the peace of mind of buying a not-new car. The main thing to do is to see what you get for your money.

Pros

  • Overall less risk. These cars have passed rigorous inspection, are younger and have a longer warranty.
  • Lower APR. Certified pre-owned cars usually qualify for lower APRs when financing than regular used cars.

Cons

  • Increased price. You pay for the added benefits.
  • You can only get one from a dealership. No used car lot shopping here.

Certified pre-owned car vs. a new car

A certified pre-owned car might be less expensive than a new car and have the same length of warranty as if you bought it new. In that case, you might want to take your savings and run.

Certified pre-owned car vs. a regular used car

If you are comparing a CPO car with a used car, there are two ways you could get the same peace of mind with a traditional used vehicle that generally comes with a certified pre-owned car.

First, you could get the used car inspected by an independent mechanic to ensure that it’s ship-shape. You could also look at buying a comparable extended warranty.

If the certified pre-owned vehicle costs less than the regular vehicle with the inspection and the warranty, consider going with the CPO vehicle. If you are satisfied with what your mechanic says, however, and you’re not worried about a breakdown, consider buying the less expensive, regular used car.

 

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