The decision to buy a new or used car is two-dimensional. You should seriously consider a certified pre-owned car that comes with more benefits than a simple used vehicle. Buying a car is a significant financial decision, and while the draw of a brand-new vehicle is strong, many consumers are turning to certified pre-owned (otherwise known as CPO) cars for a smarter, more budget-friendly option.

We, ourselves, purchased a CPO vehicle from a major manufacturer, and we couldn’t be happier. CPO vehicles offer a middle ground between new and used cars, providing the reliability of a new car with the affordability of a used one. This guide will walk you through the benefits, considerations, and steps to take when purchasing a certified pre-owned car.

What is a Certified Pre-Owned Car?

(photo: Honda)

A certified pre-owned car is a used vehicle that has undergone a thorough inspection and refurbishment process by the manufacturer or a certified dealership. Many CPO vehicles are returned to the dealership after a 2- or 3-year lease program has ended, meaning these vehicles were driven for a limited number of miles by a single owner. These cars usually meet specific age and mileage criteria set by the manufacturer, which means you can count on a vehicle that’s in excellent pre-owned condition. It also has to meet specific conditions in terms of its body, engine, interior, etc.. After passing a multi-point inspection, the vehicle is certified and typically comes with an extended warranty, roadside assistance, and other perks.

Benefits of Buying a Certified Pre-Owned Car

(photo: Mazda)
  1. Quality Assurance: CPO cars undergo rigorous inspections that cover mechanical, cosmetic, and safety aspects. This ensures that the car is in excellent condition and meets high-quality standards.
  2. Extended Warranty: One of the main advantages of CPO cars is the extended warranty, which often includes both limited bumper-to-bumper and powertrain coverage. This adds a layer of protection that standard used cars don’t typically offer.
  3. Lower Depreciation: Unlike new cars that lose a significant portion of their value as soon as they’re driven off the lot, CPO vehicles have already undergone their steepest depreciation. This means you’re less likely to lose as much value over time.
  4. Financing Options: Many manufacturers offer favorable financing rates for CPO vehicles, similar to those available for new cars. This can make CPO vehicles more affordable than regular used cars, which often come with higher interest rates.
  5. Peace of Mind: Buying a CPO car provides peace of mind, knowing that the vehicle has been thoroughly vetted and comes with a manufacturer-backed warranty. This is a significant advantage over buying a non-certified used car, where the vehicle’s history might be less clear.

Things to Consider When Buying a Certified Pre-Owned Car

  1. Cost vs. Benefits: While CPO cars are generally more expensive than non-certified used cars, the added benefits like warranties and inspections can justify the higher price. Evaluate if the cost aligns with the peace of mind and added protection you're seeking.
  2. Certified by Manufacturer vs. Dealership: Not all certifications are created equal. Manufacturer-certified programs are usually more reliable because they adhere to stringent guidelines set by the automaker. Dealership-certified programs might not be as rigorous, so ensure you understand what the certification entails.
  3. Inspection Checklist: Ask for the inspection report to understand what was checked and any parts that were replaced or repaired. A detailed inspection checklist can give you confidence in the car’s condition.
  4. Warranty Coverage: Review the warranty coverage carefully. Check the duration, mileage limits, and what exactly is covered. Some CPO warranties only cover specific components, so it’s crucial to understand the limitations.
  5. Vehicle History Report: Always ask for a vehicle history report, such as those provided by CARFAX or AutoCheck. This report can reveal vital information about the car’s past, including accident history, title issues, and previous ownership.

Steps to Buying a Certified Pre-Owned Car

  1. Research and Narrow Down Your Options: Start by researching different makes and models that fit your needs and budget. Keep your options in terms of model choice because selection will be limited. Check CPO programs offered by various manufacturers to see which ones provide the best coverage and benefits.
  2. Set a Budget: Determine how much you’re willing to spend, including down payment and monthly installments. Remember to factor in insurance, taxes, and registration fees.
  3. Visit Certified Dealerships: Visit certified dealerships and test drive the vehicles you’re interested in. Pay attention to how the car feels, listen for any unusual noises, and ensure all features work properly.
  4. Review the Certification and Inspection: Ask to see the vehicle’s certification documents and inspection report. Verify that the certification was performed by the manufacturer or a reputable dealer. Look over the car and take it for a longer test drive if it’s the one you want..
  5. Negotiate the Price: Even though CPO cars are generally priced higher, there is still room for negotiation. Use resources like Kelley Blue Book or Edmunds to understand the fair market value of the vehicle. Educate yourself before you check out the car.
  6. Review Financing Options: Explore financing through the dealership, banks, and credit unions. Compare interest rates and terms to find the best deal. Just because the CPO deal is a good one doesn’t necessitate a good financing deal.
  7. Read the Fine Print: Before signing any agreements, carefully review the terms of the warranty, return policy, and any additional fees. Make sure you fully understand what is covered and what isn’t. Don’t close the deal until you know every detail of the transaction.
  8. Seal the Deal: Once you’re satisfied with the terms, finalize the purchase. Ensure all paperwork is complete and that you receive copies of the warranty, inspection report, and any other relevant documents. Keep all of these records in a safe place in case you need to reference them in the future.
    9. (photo: BMW)

Buying a certified pre-owned car can be a wise decision for those looking to balance cost, quality, and peace of mind. By understanding the benefits and taking careful steps in your purchasing process, you can drive away in a car that feels almost new without the hefty price tag. Always do your homework, ask the right questions, and don’t rush the decision. With the right approach, a CPO car can provide many years of reliable and enjoyable driving.