In a NutshellIf you’re shopping for a used car, you might wonder if it’s a good idea to focus on vehicles that are certified pre-owned. Certified pre-owned, or CPO, programs are set up to provide some assurance about the condition and reliability of a used car for sale. CPO vehicles can be more expensive than cars that aren’t certified. But the details of certified pre-owned programs — including standards for age, mileage, damage, and any warranty or service coverage — vary among dealers and manufacturers.
Used cars for sale can be broadly divided into two groups: Those that are certified and those that aren’t. There can be a world of difference between the two.
Certified pre-owned cars may come with thorough reconditioning to make them look as new as possible, some sort of warranty and extras like roadside assistance. They can also be significantly more expensive than used cars that aren’t sold as part of a certified pre-owned program.
But each manufacturer or dealer can have a different definition of what constitutes a certified pre-owned vehicle. So if you’re thinking about buying a CPO car, it’s important to know what your particular dealer or the car’s manufacturer means by “certified.”
Here’s what to keep in mind if you’re shopping for a certified pre-owned car.
- What does certified pre-owned mean?
- What’s the difference between used and certified pre-owned cars?
- Types of certified pre-owned cars
- Is it worth buying certified pre-owned cars?
- What to watch out for with certified pre-owned cars
What does certified pre-owned mean?
You can generally take “certified pre-owned” to mean that a car is being sold through a dealership or manufacturer program that sets certain standards for its used vehicles for sale.
As with standard used cars, certified pre-owned vehicles are offered in all body styles, including coupes, sedans, minivans, trucks, hatchbacks or SUVs. And CPO vehicles are offered across a wide range of price points, from high-end luxury cars to budget-friendly subcompact models.
Many CPO programs require their cars to pass some sort of detailed inspection and be under a certain age, with limited mileage. Audi, for example, requires cars to pass a “300+-point” inspection and to be 5 years old or less, with fewer than 60,000 miles.
No history of major damage is another common requirement. Certified pre-owned cars may also come with extended warranty protection and, in some cases, extras like roadside assistance.
What’s the difference between used and certified pre-owned cars?
CPO cars may differ from other used cars in a few key ways.
Where they’re sold
One notable difference between CPO cars and other used cars has to do with where they’re sold. Used cars are sold at a host of different outlets — private parties, franchised and independent dealers, rental car companies, leasing companies and used-car superstores. CPO cars are typically only available at dealerships. You’ll never find them offered for sale by private parties.
A used car may or may not come with warranty protection. A certified pre-owned car typically comes with warranty coverage backed by either the manufacturer or the dealer.
Inspections and reconditioning
Some used cars benefit from varying levels of inspection and reconditioning before being offered for sale, but many are sold as is. With certified pre-owned vehicles, the dealer guarantees that a multi-point inspection and reconditioning have taken place. It also shares explicit details of what kind of inspection and reconditioning have been done.
Age and mileage
Used cars come in all ages, and there are no limits regarding mileage. Typically, with CPO vehicles, only newer vehicles with less than a certain number of miles on the odometer are eligible for the program.
A used car may or may not have had a serious accident in its past. A car typically isn’t eligible for a CPO program if it’s been in a major accident.
Some certified pre-owned cars come with perks such as roadside assistance. These perks aren’t typically offered with used cars.
Types of certified pre-owned cars
Some certified used vehicles are manufacturer-backed and others are backed by a dealer.
Manufacturer-backed certified pre-owned
With manufacturer-backed certified pre-owned programs, each manufacturer has its own specific requirements, although they may be similar to one another. For example, Honda requires its certified pre-owned vehicles to pass a 182-point inspection (compared to Audi’s 300+-point inspection), and it restricts the program to vehicles under 6 years old (compared to Audi’s cutoff age of 5).
Manufacturer-backed certified pre-owned cars are often sold by the automaker’s franchised dealers. For example, you can buy a certified pre-owned Ford truck through a Ford dealership that sells new Ford vehicles.
Many automakers offer manufacturer-backed CPO vehicles that are sold by popular brands, such as Chevrolet, Jeep, Mazda, Nissan, Subaru and Toyota. Luxury brands such as Acura, BMW, Cadillac, Infiniti, Lexus and Mercedes-Benz also offer CPO programs.
Dealer-backed certified pre-owned
With dealer-backed certified programs, the scope of the inspection and any other requirements are determined by the dealer and not the manufacturer. This means that the thoroughness of these inspections may vary more widely, since they’re not subject to any one manufacturer’s standards.
Dealer-backed certified program vehicles don’t include a manufacturer-backed warranty, though they may have a dealer-backed warranty.
Is it worth buying certified pre-owned cars?
Certified pre-owned car programs may offer some additional benefits. Here are a few examples.
Extended warranty protection
Reliability can be a huge question mark (and big financial risk) with used cars. Some certified pre-owned cars come with a warranty that can help protect the owner from having to pay out of pocket for certain repairs. For manufacturer-backed warranties, the coverage may specify that you get repairs done at a manufacturer franchised dealership. But be sure to read the details of your warranty to understand which repairs are covered — warranties vary in length and specifics depending on the manufacturer or dealership.
Sellers recognize that people shopping for a certified pre-owned car want a vehicle that performs well and looks as new as possible. As part of their inspection, technicians may examine and repair exterior components of the car — such as paint, glass, door molding and window trim — to try to achieve this result.
Certified pre-owned vehicles may come with extra perks, such as free roadside assistance, complimentary satellite radio for a limited time or money toward a car rental if your vehicle needs repairs.
As with new cars, some manufacturers offer special promotions on certified pre-owned vehicles if you finance through the dealership. These promotions may include cash back or an intro low annual percentage rate, or APR. Keep in mind that these offers may only be available to borrowers with strong credit.Can I get a car loan with bad credit?
What to watch out for with certified pre-owned cars
Certified pre-owned cars can come with some drawbacks.
Certified pre-owned cars may have higher prices
Certified pre-owned cars tend to cost more than used cars that aren’t sold through a certified pre-owned program. Some of the higher cost is due to expenses associated with the inspection, any repairs and warranty protection, which are typically folded into the price. Depending on the car, a certified pre-owned vehicle can cost a few hundred to a few thousand dollars more than a car of the same make, model and condition that isn’t certified.
Here’s another cost to consider: Even if a certified pre-owned program says a car has been inspected, it’s recommended that you still have the car inspected by an independent mechanic before you buy. That can cost around $100.
Stock is limited to newer models
Many certified pre-owned vehicle programs limit their vehicles to newer models. For example, a vehicle must be less than 6 years old to qualify for Ford’s certified pre-owned program. And, like Audi, Chrysler certified pre-owned vehicles can’t be more than 5 years old. If you’re looking to do your budget a favor by purchasing an older used vehicle, you may find that your certified pre-owned choices are limited.
Shoppers may shy away from used cars out of fear they might not be reliable. Certified pre-owned car programs are designed to soothe these concerns.
Just remember: While many certified pre-owned cars could be in great shape, they’re not brand new — and certified pre-owned eligibility requirements, inspections, possible warranties and perks vary from manufacturer to manufacturer and dealer to dealer.
Take the time to understand your chosen automaker’s or dealership’s standards for certified pre-owned vehicles and read the fine print. This will help you set realistic expectations for your purchase.
And when buying any pre-owed vehicle — used or CPO — it’s a good idea to take a look at its vehicle history report. These reports are offered by companies like Carfax, and they’ll provide you with useful information regarding the vehicle’s ownership and accident history.