What Is a Certified Pre-Owned Car?

January 16, 2019

To buy a new car or to buy a used car—that is the question! A certified pre-owned (CPO) vehicle balances the luxury of new with the affordability of used. Here are 5 things that you should know about CPO cars before you go into a dealership

What does Certified Pre Owned Mean for cars?

A certified pre-owned car (CPO) is a car that has been inspected, refurbished, and certified by a franchised dealership before it’s sold.

Having a used car that is in excellent condition and certified might seem too good to be true, but if you do your research, you’ll quickly realize that it can be a great investment.

Here are 5 things that you should know about CPO cars before you go into a dealership.

1. Who certifies the car?

There are two different kinds of certifications for CPO cars. Dealer-certified cars are authorized by the dealership in accordance with their own in-store standards. 

Manufacturer-certified means that the car has met specific requirements backed by the maker of the car. The manufacturer sets out the criteria for the program nationwide, ensuring that the same quality of CPO car is met at every dealership in their franchise.

Ask the dealership: Is this vehicle a part of the CPO program?

2. How does a car become qualified?

CPO cars are the top echelon of used cars that you can buy. When a dealer receives a used car, be it by trade-in or by purchasing at auction, it is put through inspection by a factory-certified mechanic. If the car meets the standards, it is then repaired (i.e., brake jobs, front end repairs, an oil change, etc.) and offered for sale as a CPO vehicle. 

3. What are the qualifications for a CPO car?

Every manufacturer is able to set their own criteria for which vehicles are allowed into their CPO program. Here are a few examples: 

  • A Ford CPO vehicle must be under 6 years of age and have less than 120,000km on the odometer to qualify. Then it must pass a 172-point comprehensive inspection to receive the certification. 
  • Honda CPO vehicles must be within the past six model years and pass a 100-point inspection.
  • Hyundai CPO vehicles must be model year 2013 or newer with less than 120,000km and pass a 120-point inspection to qualify. 

4. What benefits are there to a CPO program?

With a CPO car, your vehicle will hold better value if you happen to do a trade-in later down the road. This is a great incentive to keep your car running smoothly. In the program itself, there are usually many more benefits that prove the worth of buying a certified pre-owned vehicle. 

  • Additional warranty. In addition to the rest of the new vehicle warranty, most manufacturers extend a limited bumper-to-bumper coverage as well as a year or two extra on the powertrain warranty. 
  • Roadside assistance. If you do have a breakdown with your CPO, most brands include a year of complimentary 24/7 emergency roadside assistance to come to your aid. 
  • An exchange period. What if you don’t like your car after a week or two? With many CPO programs, you have the first month to exchange it for a different CPO car. 
  • Lower financing rates. Often a CPO purchase will have subvented rates that are much lower than available bank financing rates, saving you money on interest charges. 
  • Extra perks. Sometimes, you can get a few months of SiriusXM radio with your CPO purchase or access to your Carfax vehicle history report online. 

Ask the dealership: Can I see more about the car’s history?

5. What's the catch?

If you decide to have your next car CPO certified, you’ll be paying more for it. Costs can range anywhere from $200 up to $3,000 extra. 

If you’re on a tight budget and every penny counts, the extra cost might not seem worth it. There may be another car just like it on your shortlist that isn’t certified pre-owned, just a regular used car, and it’s likely advertised for less. 

And if you intend to do your own servicing and repairs, is the extra coverage really necessary? 

It certainly could be worth it, especially as many car repairs, whether electrical or mechanical, can easily reach the $500 to $2,500 mark quickly. And, compared to a non-certified car, you’ll be less likely to encounter issues given the measure of inspection. This means that you’ll not only be saving money, but you’ll also be keeping safe on the road. 

Ask the dealership: When does the warranty coverage start and what does it cover?

CPO vehicles are backed up with an extended warranty and subjected to an in-depth inspection that will give you some serious peace of mind. On the other hand, just because a used vehicle isn't manufactuer- or dealer-certified, that doesn't mean it isn't perfectly reliable. The used car market is extremely robust, and there are great deals to be found on reliable vehicles that don't meet CPO age & mileage criteria.

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