If you’re buying a used car, you have multiple options. You can buy a car through a private seller that you find on Facebook Marketplace, Craigslist, or even around your neighborhood. You can visit a used car dealership or a new car dealership that also sells used cars. Or you can buy from a local mechanic who fixes up used cars and sells them, and you can even find cars at auctions.
If you’re looking for the greatest peace of mind from your used vehicle purchase, you may consider buying a certified pre-owned (CPO) vehicle from a certified dealership.
Read More: What Is a Certified Pre-Owned Car?
What Is a Certified Pre-Owned Car Dealership?
A certified pre-owned car dealership is one that sells cars that are part of a CPO program, which means they’ve been through a thorough inspection, usually a multipoint inspection that examines hundreds of areas of the car. CPO vehicles have been deemed by the automaker to be in excellent condition.
If you can’t afford to lease or buy a new automobile, a CPO car can be a good compromise, as it can deliver the same peace of mind as buying a new vehicle. You can be assured about the condition of a CPO car because it undergoes a thorough multipoint inspection. It may even come with a manufacturer’s warranty. Often, CPO cars are vehicles that were leased and then returned at the end of three years with relatively low mileage.
Most car dealerships that have CPO programs only sell certified pre-owned vehicles from the same automaker as the newer vehicles on the lot. In other words, you’ll find a certified pre-owned Toyota at a Toyota dealership. That’s because the automaker creates the CPO program and sets the parameters for certification.
Some certified pre-owned car dealers sell CPO cars that are not part of an automaker’s CPO program. They may sell vehicles that are up to seven years old and have gone through their own inspection process. Since the inspection is not designed by an automaker to meet specific standards, the vehicle could have issues or may not meet the quality standards of an auto manufacturer’s CPO program.
Additionally, cars that come from these so-called “certified pre-owned” car dealers not backed by a manufacturer’s CPO program do not have a manufacturer-backed warranty. In fact, they may not even have an extended warranty of any type.
Read More: Is an Extended Warranty Worth It on a New Car?
Do Certified Dealers Only Sell CPO Cars?
Just because a vehicle is sold by a certified car dealer doesn’t necessarily mean the vehicle is a certified pre-owned car. Any auto dealership can have a mix of used cars and CPO cars on its lot, often available at different price points.
Used cars may be the same age, have similar mileage, and be just as safe and reliable as a similar CPO car, but there’s no guarantee of that. For that reason, used cars often sell for less money than CPO cars.
Make sure to ask if a vehicle is certified pre-owned before you make an offer. It can get especially confusing if you're browsing online or you visit a car dealership that carries a mix of new cars and older vehicles.
For instance, Honda recently started listing non-certified, used vehicles on their website, HondaCertified.com. Previously the domain of Honda’s CPO models, the automaker sees its non-certified offerings as a way to make their cars affordable to more people, especially young drivers.
However, these used vehicles have not undergone Honda’s rigorous pre-owned inspection process and may be up to 10 years old.
The Certification Process: Questions to Ask When Shopping for CPO Cars
While most vehicle manufacturers have CPO programs, not all programs provide the same rigorous testing. If you haven’t searched the information in advance for the brand of car you want to buy, you should ask about the certification process at your specific certified car dealership.
In general, CPO car age limits range from about five to seven years. Although CPO cars can certainly be newer (as is the case with lease returns), they usually can’t be older. To qualify, most manufacturers want the vehicle to have no more than 75,000 miles on them, although Toyota certifies vehicles with up to 85,000 miles.
Read More: What Happens at the End of a Car Lease?
Inspections can range from 100 or more points up to 200 or more. Certain issues, such as an accident history or body damage, can immediately disqualify a vehicle from most manufacturer’s CPO programs.
Crucial points in an inspection include brakes, tires, suspension, engine mounts, and fluids. Some of these elements, such as brakes and tires, can be costly to replace if they wear out after purchase. Buying a certified pre-owned vehicle can give you peace of mind that you’ll have some time before these parts need maintenance.
Since CPO programs vary widely, ask your certified car dealer about the elements of their CPO program, including:
- The maximum age of the vehicles
- Maximum mileage allowed
- How many aspects of the vehicle are inspected
- Some of the most important points within the inspection and the standards set
- What’s covered under the warranty
- How long the warranty lasts (years and/or miles)
You may also want to ask about the vehicle’s built-in return policy. Some certified car dealerships permit you to exchange the vehicle you purchased for another vehicle off their lot if you're unhappy with your choice. By allowing this, they get to keep your business and you can feel good about your selection – of the dealership and the vehicle you take home.
Benefits of Certified Pre-Owned Cars
Certified pre-owned cars offer a myriad of benefits to their owners. Many certified car dealers offer special financing terms on CPO cars, which can be as low as 2 percent or even 0 percent. If you aren’t paying cash for a used car, low-interest financing can save you a bundle over time.
Read More: The Best Auto Loan Interest Rates for 2020
Certified pre-owned vehicles from reputable dealers also provide some level of assurance that you won’t need to replace parts like brakes or tires any time soon. In addition, major components like the engine, transmission, alternator, fuel pump and water pump have all been checked over and should last for a while, too.
For many people, the key benefit to a certified pre-owned vehicle is the manufacturer’s warranty. Many CPO cars still carry their new-car warranty, which means the vehicle is protected for at least a few thousand miles or several years.
For instance, if you buy a 4-year-old CPO Hyundai with 40,000 miles that originally came with the company’s 5-year, 60,000-mile comprehensive warranty and it’s 10-year, 100,000-mile powertrain warranty, you’d still have one year or 20,000 miles of bumper-to-bumper coverage available and 6 years, or 60,000 miles left on the powertrain warranty. Plus, these warranties usually include roadside assistance for added peace of mind.
Should You Shop at a Certified Car Dealer?
Certified car dealers that are associated with specific manufacturers may know more about the cars they sell than used car lots that sell a variety of makes and models of cars. If you know the type of vehicle you want to buy, you can save time visiting a certified car dealer and tap into the salespeople’s knowledge of the various trim packages and the pros and cons of each model they sell.
CPO cars can undoubtedly save money over a new vehicle of the same type. You’ll gain many of the benefits of new car ownership without the high price tag.
However, if you’re debating between a regular used car and a CPO vehicle, keep in mind you might pay more for a certified pre-owned vehicle than for a used car that did not undergo such a thorough inspection and no longer has its manufacturer’s warranty.
The warranty that comes with a CPO car could save you money over time – but it might not. It’s important to consider if it would be worth it to purchase a regular used car and buy an extended warranty – or simply save the money you’d spend on the extended warranty in a high-yield savings account in case you need emergency car repairs.
Read More: 5 Automatic Savings Apps to Help You in 2020
Whether you buy new, used, or certified pre-owned, remember that car prices are typically negotiable. The deal you get could depend not so much on the condition of the vehicle, but on how well you can haggle.
- Road Show: Honda Becomes First Automaker to Add Non-CPO Used Cars to Its Website
- Car and Driver: Top 10 Points in a CPO Inspection, and Why You Can't Miss Them
- Motor1.com: Hyundai Warranty: Is America's Best Warranty Enough?
- Autotrader: Can You Return a Car You Just Bought?
- Consumer Reports "The Truth About Certified Pre-Owned Cars," Accessed Nov. 30, 2019.
- Carfax. "Car Depreciation: How Much Value Will a New Car Lose?," Accessed Nov. 30, 2019.
Dawn Allcot is a full-time freelance writer, content strategist, and founder of GeekTravelGuide.net, a travel, technology, and entertainment website. A seasoned finance writer, her work has appeared on Forbes, Bankrate, Lending Tree, Solvable, Moneycrashers, and many other personal finance sites, including the award-winning Chase News & Stories portal. With more than 20 years editorial experience, Dawn seeks to take complex concepts and simplify them for today's busy readers. Whether she is writing about taxes or technology, her goal is always to educate, inform, and entertain.