Certified pre-owned vehicles, also called CPOs, combine the advantages of buying new and used automobiles. Basically, the vehicle is guaranteed to have been inspected, refurbished, and accredited by a manufacturer, dealer, or a third party. Most CPO vehicles are under an extended warranty and are subject to additional benefits at car dealerships. If you feel that a CPO vehicle may be a viable option for you, read on to familiarize yourself with how these programs work.
The Advantages of CPO vehicles
1. Peace of Mind
A CPO guarantee provides wary customers the relief of knowing that they are buying a vehicle that is in great condition. Many people do not mind if a vehicle is a few years old as long as they receive assurance from its certification.
2. Affordability
The luxury auto market is filled with CPO offers, and they may be attractive options to a prospective buyer who cannot afford to buy such a vehicle when it’s new. Also, new automobiles experience tremendous depreciation as soon as they are driven off the lot, so many drivers opt for a gently used model instead so they can save money.
3. Extended Warranties
CPO vehicles are typically covered by extended warranties, while regular used autos are not. Though these extended warranties add to the overall price of the vehicle, the total cost is still much less than any new auto of the same make and model.
However, remember to note when each warranty begins. Some warranties begin on the date that the vehicle is delivered to the auto seller by the original owner, while others begin once the new vehicle warranty expires. Also, some CPO warranties have a deductible that must be met before repairs are covered.
4. Additional Perks
There may also be other advantages to having a CPO vehicle, such as roadside assistance, special return and exchange policies, and exclusive lending terms from car dealerships.
Parties Determining Certification
The three types of certification are manufacturer certified, seller certified, and certification by a third party.
1. Manufacturer Certification
The majority of CPO cars are covered by manufacturer-backed programs. It is important to conduct your own research to find out what your auto’s manufacturer considers to be “certified,” since each company has its own standards.
If you wish to purchase a manufacturer-certified vehicle, you must visit an authorized seller for the maker’s franchise. You can usually find a model with less than 80,000 miles that is under five years old. In contrast to a seller-backed plan, a manufacturer CPO warranty must be honored by any of the car dealerships affiliated with your vehicle’s brand.
2. Seller Certification
Car dealerships also have certification processes outside of the manufacturers’ programs. Unfortunately, this often means that the warranty could be valid only at that particular seller and not at other car dealerships. This could be a major disadvantage to drivers that travel often. Always remember to get in writing where you may take your auto for warranty repairs.
One advantage to seller-backed programs, however, is that you can pick and choose the warranty coverage that you need. You may prefer to purchase a plan that only covers secondary components rather than comprehensive coverage.
3. Third-Party Certification
The last type of certification is the type offered by third parties. They advertise widely that they put vehicles through rigorous inspections and that they have standards as meticulous as the sellers and manufacturers. Many even offer extended warranties that are the same as the other types of programs.
Importance of Certification
If the vehicle you wish to purchase is one with a bad reputation for pricey repairs, and it is not within your budget to purchase a new model, then buying a CPO vehicle is worthwhile. It is especially ideal if the particular auto you plan on buying has an extensive history of transmission problems or engine trouble.
However, if the vehicle you are considering has been reliable throughout its life and it’s still under five years old, it may not be worth paying a premium price for certification. If minor components such as the air-conditioning unit or the radio are the only parts that have failed in the past, then it may be more financially prudent to forgo certification.