If you are in the market for a not-so-new car, you’ll get more for your money with a certified pre-owned car. CPO vehicles, as they are called, generally cost more than a similar make and model with similar mileage that has not been certified, but in the long run you’ll save money. Here’s why:
A used car is purchased “as is,” warts and dings and all. If you are lucky, you also get what’s left of the manufacturer’s warranty and a maintenance and repair history from Carfax. Reputable used car dealers generally provide such reports for free (one Carfax report costs $39.99 if you buy it yourself), but private sellers rarely do.
Most CPOs are leased vehicles that have been turned in to the dealer after two or three years. Leases are normally limited to 15,000 miles a year without incurring penalty costs, which means there’s less mileage and wear and tear than with non-certified used car, which is likely to have two or three times the mileage of a certified pre-owned.
Before a vehicle is sold as a CPO, it undergoes a manufacturer-mandated inspection by a factory-trained technician. The 150 or more points of inspection cover everything from the engine and electronics to the child seat anchor connections. With this inspection, you know the car is truly in working order. Certified pre-owned vehicles typically also come with a warranty, plus a free Carfax or similar report so you can see its maintenance and repair history.
Here’s what four top manufacturers offer, according to Edmunds, a leading consumer automotive information provider:
- Volkswagen: Two-year, 24,000-mile warranty that starts with date of purchase, plus remainder of new car warranty.
- Ford: One-year, 12,000-mile comprehensive warranty from date of sale.
- Chevrolet: One-year, 12,000-mile bumper-to-bumper warranty from date of sale, plus five-year, 100,000 mile limited warranty from the date of the vehicle’s first purchase.
- Honda: One-year, 12,000-mile limited warranty and seven-year, 100,000 mile powertrain warranty.
All four give you free, 24-hour roadside assistance and at least partial reimbursement for a rental for any warranty repair that takes more than a day.
You don’t get any of that when buying a regular used car. Choosing a certified pre-owned vehicle will give you a more reliable vehicle less likely to break down than what I call a “plain vanilla” used car, so you are getting peace of mind for a 5%-15% premium over what a plain used car would cost. And peace of mind is priceless.
Specific prices for CPO vehicles vary widely by make, model, region and time of year. But prices for all used cars have been trending downward recently because new car sales and leases have increased, which means more there are more previously owned/leased vehicles sitting in dealer lots.
A vehicle depreciates by half in its first two years. That means you can get a luxury 2010 or 2011 model loaded with safety features including rear-view camera and even lane-departure warning for about the same price as a new car without them. (If you are looking for a new car for $20,000 or less, read my list of best-buy budget cars on ecoXplorer.)
For my money, the benefits of buying a certified pre-owned vehicle more than outweigh the extra cost over a comparable used car.