Buying A Used Car: What Does Certified Pre-Owned Mean?

Cadillac dealershipIf you consider yourself especially frugal, and you've just ruled out a new car in favor of a late-model used car that looks virtually the same, you're right on track to making a very smart decision.

That's because most new vehicles undergo their steepest depreciation in the first two to three years of ownership. There's often a psychological gut-punch of thousands the moment you drive off the new-car lot, and it's not unusual for a car to lose up to half of its original value in the first three years.

As alluring as the new-car smell can be, you'll be able to buy a lot of air fresheners (and a family vacation or or two) with all the money saved in buying used instead. And the smartest way to buy that late-model used car is by going with a certified pre-owned (CPO) vehicle.

Cherry-picked—by methodology, not just words

In short, a CPO car is the pick of the crop—a late-model used vehicle that meets certain standards for mileage and wear and has been inspected through a regimented checklist.

That checklist is typically put together directly with the automaker and contains inspections of fundamental vehicle elements and systems, as well as wearable items.

With a certified pre-owned vehicle, you can generally be assured of several things:

  • That the vehicle is in top condition and has a clean title
  • That in most cases, work was done to bring wearable items back to new or near-new condition
  • That you'll get the peace of mind that's comparable to (or in some cases better than) a new-vehicle warranty.

Depending on the vehicle brand you're considering, some may claim hundreds of items on that checklist while others will claim far fewer. Don't get caught up on that number, as some might break checking the brakes into four steps (one for each wheel) while it might be.

Exceptionally clean, detailed, and repaired—almost as new

What's typical of CPO vehicles? They're usually two- to three-year-old vehicles that have never been through auctions; they've just been returned to the dealer at the end of a lease. They're also often exceptionally clean trades from repeat customers who simply must have a new car every couple of years—and their loss, really, is your gain.

After the dealership has confirmed that odometer mileage is within an accepted range, the title's clean, and that the vehicle hasn't been in a serious accident, it's checked by the dealer's service department and body shop, if cosmetic repairs such as fixing door dings are necessary. Anything that needs to be repaired is repaired, and normal service work such as brake jobs, front-end service, and oil and filter changes, is performed.

Once the vehicle passes that multi-point inspection, it's ready for resale as a CPO car or truck, and it's backed by either a comprehensive and/or limited powertrain warranty issued by the manufacturer that covers future problems, should they develop, just as if you were buying a brand-new vehicle.

Getting the best comes at a premium

Here's the catch: Yes, you will pay a little more for the security of acquiring a CPO vehicle, regardless of make or model — on the order of a few hundred bucks for an affordable small car up to $3,000 or so if it's a luxury model, compared with a used car that isn't certified and is sold "as is."

Don't expect to get the benefits of a CPO program for free. But you can wager that the more thorough and meticulous the program is, the more these scrutinized and cherry-picked cars will be, and the less likely you'll be in your years of ownership to encounter issues.

And don't forget that a car in better condition will hold its value better if you do decide to trade in after a couple years of ownership.

In other words, even if the vehicle you're considering has a reputation for reliability, it'll probably pay in the long run to go CPO.

While CPO might mean all that, there are plenty of programs masquerading as such. What you find as CPO at some clever used lots most likely is supported by a third-party company that doesn't come close to assuring that the vehicles are up to any rigorous standard, or have warranty coverage like what's offered by the manufacturer. And even on some used lots at dealerships, you might find these 'faux-CPO' vehicles offered, confusingly, alongside some that are true CPO.

Questions you need to ask

Considering that, here's a roundup of fundamental questions to ask when you're considering a CPO vehicle:

  • Is this vehicle part of the automaker's official CPO program?
  • When does warranty coverage start and end, and what does it cover?
  • Does coverage include other perks, like loaner cars?
  • Can I see more about this car's history?

What certified pre-owned programs also provide, when it comes down to it, is time saved and hassle averted. Within the parameters of the CPO program, you should be able to find the model you want, in tip-top condition, without the worry that you should have shopped around for a better example. That peace of mind is most likely worth it.


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