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Buying a Certified Pre-owned Vehicle (CPO) – Part II


My daughter recently asked for help deciding which used SUV to buy. She was surprised when I recommended that she and her husband look at certified pre-owned (CPO) vehicles at major dealerships. Her surprise resulted from my havingShe was surprised because I have written extensively on how to buy and sell vehicles privately and online. She was expecting a lesson on how to accomplish both.

In my opinion their lives are far too busy to invest the time that is needed to create what I call a “virtual” CPO vehicle. The latter requires savvy and lots of legwork: making a great deal on a used vehicle, completing a pre-purchase mechanical inspection, then buying an extended service contract (extended warranty). 

What are the benefits of going directly to a dealer for a manufacturer’s certified pre-owned vehicle? A CPO vehicle generally meets a higher standard. Its benefits can be divided into three categories:

  • Certification/selection To qualify as certified pre-owned, a vehicle must meet an age and mileage limit. For example, Ford requires its certified vehicles to be no more than six years old with less than 80,000 miles. Vehicles also need to pass an extensive multipoint inspection with any deficiencies fixed. Ford uses a 169-point inspection process. These figures vary for each manufacturer.
  • Warranty. The manufacturer, not the dealer, provides the warranty. It’s handled like a new car warranty: the owner can take the vehicle to any authorized dealer in the 48 states.

The warranty is divided into two categories:

1. Powertrain warranty. This includes the engine and transmission, the two areas that can be the most expensive to repair. Using Ford as an example, its CPO powertrain warranty covers six years or 100,000 miles (whichever comes first) based on the in-service date, or when the vehicle was initially sold.

2. Comprehensive warranty. Also known as the “bumper-to-bumper” warranty, the comprehensive warranty covers items not included in the powertrain warranty, such as electrical, electronic, and other mechanical issues. Not all CPO programs include a comprehensive warranty. Those that do vary in length, depending on the manufacturer.

Consumers should be aware that dealers may offer to extend the comprehensive warranty for a fee, in some cases matching the length of coverage of the powertrain warranty. This can be advantageous, but needs to be considered on a case-by-case basis. Variables include what’s covered, the term of coverage, and the cost.

3. Extras. These can include a free vehicle history report, 24/7 roadside assistance, trip interruption service, and in rare cases a return/exchange program, along with other goodies.


Time is Money

You can literally walk onto a dealer’s lot and drive off in your next vehicle a few hours later (something my daughter and her husband did). Dealers can take care of the financing and complete all the paperwork, saving you a trip to the DMV. You pay a premium for this option, but it is well worth the price to many people.

If you have the time, a virtual CPO vehicle may be your best option because it’s usually less expensive. Creating a virtual certified pre-owned vehicle will be covered in Part III of this series.

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L. James Johnson's new book, HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online! is available for download at BayAreaCarGuy.com. You can also download his FREE report, The 8 Biggest Mistakes Used Car Buyers Make & How to Avoid Them!

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