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All about Certified Pre-Owned Vehicles

Before a certified pre owned vehicle (CPO) ever hits the lot, it must undergo a multi point inspection, and if anything is wrong, it must be fixed.  Buying a CPO is a sure way to feel more confident about owning a used car.  If anything goes wrong within the period of the warranty, you will not be strapped with enormous repair bills.  This may give some in search of a used car a peace of mind.   The CPO market has expanded over the past few years, and continues to grow, so this type of used car should be readily available.

Reasons to go with a CPO

New vehicles depreciate at a rate of about 20% a year.  This is what makes buying a CPO a worthwhile investment, because, despite the additional cost involved in the inspection, refurbishment and warranty, it is still a good deal.  Certified used cars include only vehicles that are under 5 years and have a mileage of under 100,000.  Only vehicles that have had no major bodywork from prior accidents are used.  Some programs offer cash incentives, low interest loans, and an exchange policy.  Finance and lease deals are being extended to a used vehicle. This was virtually unheard of in the past, and is what really separates certified pre-owned vehicles from other used cars.  This new option for used cars is one of the reasons that has persuaded new car buyers to enter the used car realm.

Things to be aware of

It is true that certified vehicles are more expensive than conventional used cars.  The added value of the refurbishing and warranty creates an opportunity for dealers to sell these used cars at a higher price.  Certified used cars that sell in the $10,000 to $20,000 range are estimated to be $500 to $1,000 more expensive.  A non-certified model could save you hundreds or even thousands by passing on the certification warranty and accepting a few extra blemishes. This is especially true since any late-model used car is likely to be in good shape, certified or not.

What the Inspection will include

Every CPO will undergo an inspection with 75 to 140 points, all programs work differently and some will even include more than this.  You should assume that the vehicle has been refurbished in these areas if it passed the inspection to get a certification.  Looking at these points you can identify any major work that has been done, that otherwise would have been very expensive to fix.  Some of the key inspection points are: suspension (alignment, tire wear, tie rods, ball joints), interior check (airbag functions, interior light function, audio system, etc.), Road Test (transmission issues, clutch, steering, brakes/ABS, and gauge performance), the VIN Inspection, which includes emissions regulations, any possible recalls, and VIN code issues, brakes (hydraulics, brake lines, rotors), fuel systems, which covers the fuel lines, the pump, and oil pressure, exterior check (frame/ past accident damage), and the powertrain, looking for any fluid leakage, oil issues, timing belt and cylinder efficiency

The CPO Warranty

Still negotiate the price of the vehicle. You can get an idea what a non-certified vehicle of the same age and mileage is worth through various websites. The price for a certified vehicle with a warranty is likely to be higher, but the figure will give you a starting point for negotiating.  Always read the certification benefits carefully. Find out what the warranty covers and whether you'll need to pay a deductible for qualifying repairs.  When reviewing the warranties offered, research whether the particular model has a history of maintenance issues or transmission failures and decide if it is a good warranty from that perspective. If the make of the vehicle is known for quality and low maintenance, a shorter warranty may be fine. Find out where you must bring the car for warranty work — the original dealer, any same-brand dealership or some type of independent repair shop. Ask what you're required to do in emergencies if no dealer is nearby. Note whether the certification is transferable if you sell the car and, if so, whether there's a transfer fee. Most programs offer an extended warranty beyond the CPO warranty, but each program differs in cost and features.  Find out the details before you decide to add this on.

Although not everyone will find the added price worthwhile, CPOs offer an excellent new alternative to buying new, especially with the economy the way it is today.  Many organizations have come on board to sell CPOs, including the more traditional automotive manufacturers, but also dealers and third-party suppliers.  Certified used cars are part of the used car future, they give consumers an affordable option for warranties and financing, but most importantly, a peace of mind that is unique throughout the used car buying process.