Buying a certified pre-owned car: What to know

If you’re in the market for a used car or know someone who is, you may have heard people mention the possibility of buying a certified pre-owned car. While every used car is technically “pre-owned,” it’s the “certified” part that makes certified pre-owned (CPO) cars so interesting. Let’s learn a little more about what makes these cars so special, and why you might want to consider looking for one.

Used vs. certified pre-owned vehicles

A certified pre-owned vehicle differs from your run-of-the-mill used car. That's because CPO vehicles need to meet specific standards set by manufacturers. Typically, a CPO car is a late-model car with low mileage that’s undergone inspection and reconditioning to bring it back to like-new status. That means buyers have the assurance that the vehicle is likely free from any major defects and — most importantly — covered by a manufacturer’s warranty.

This added peace of mind when it comes to quality does mean that there’s a price difference between used vs. certified pre-owned vehicles. CPO cars tend to cost more. It may be possible to find a less expensive used car that’s still quite similar to its CPO counterpart. However, this will likely require additional time and effort on your part to ensure that the car meets the same standards a CPO car would, which may also entail scheduling your own inspections.

How are certified cars selected?

Used vehicles that qualify for certification tend to be models that are generally less than five years old and below a certain mileage (around 60,000 miles or less). Often, these are cars that were leased and purchased in good condition by a dealership. Age and mileage requirements tend to vary from one manufacturer to another, but all CPO cars are assumed to be mechanically and cosmetically sound based on rigorous inspection and repair.

Once selected for certification, the vehicle is thoroughly inspected by factory-certified mechanics, typically at an authorized service center which may or may not be associated with a dealership. They will also handle any necessary repairs or restoration of worn or damaged parts. It’s only after this process is complete that the car can be listed as a certified pre-owned vehicle. While different manufacturers have their own criteria for selection, you can generally be assured that only high-quality cars become certified.

Certified pre-owned vs. dealer-certified

You may occasionally find dealerships offering their own versions of a “certified” vehicle under a “dealer-certified” label. It’s important to note that these cars may not be subjected to the same rigorous inspection and repair process as cars certified by the manufacturer.

Pros and cons of buying a certified pre-owned car

If you’re still debating whether buying a certified pre-owned car is the right move for you, it may help to consider some of the pros and cons.

Pros of buying a certified pre-owned car

• Lower risk: When considering a certified car vs. non-certified, one major advantage of CPO vehicles is that you probably have less risk of discovering something’s wrong with the car after the sale, since CPO cars are rigorously inspected.
• Lower price than new cars: A CPO car has been restored to like-new condition, but for a price tag that could be significantly lower than a new car would be.
• Newer cars: Since CPO cars tend to be under a certain age, you get to have a current-generation car that’s unlikely to become entirely outdated soon.
• Warranties and other coverage: All CPO cars feature some level of warranty backed by the manufacturer or dealer. The exact nature of the coverage tends to vary and should be fully understood by the buyer, but may be better than buying a used car with no warranty at all. Some CPO cars may also have additional coverage like trip interruption insurance in case something goes wrong with your car while you’re on the road.

Cons of buying a certified pre-owned car

• Fewer choices: Since the CPO process can be rigorous to pass, you may not always find a certain make, model, color or trim available. You may need to be more flexible on some of these aspects.
• Costs more than uncertified used cars: The fact that CPO cars need to meet certain age and mileage requirements coupled with the inspections and repairs they undergo tends to add to their cost. It’s the price you pay for the peace of mind you get from knowing the manufacturer stands behind the vehicle.
• Deals may vary: CPO programs aren’t standardized, so everything from the requirements to become a CPO car all the way to the kinds of incentives or warranties and coverages offered will vary from one manufacturer to the next. You’ll need to look at the fine print to ensure it’s what you wanted.

In summary

As you can see, buying a certified pre-owned car can be a helpful option for the buyer who wants a little extra peace of mind about their used car. While the CPO process does add a little more to the overall cost, it can be worth it to know that the car you’re getting is in good shape. If something does happen to go wrong with the vehicle, there’s a chance it’ll be covered.