CPO Cars: What Is Certified Pre-Owned?

What Does Certified Pre-Owned Mean?

A certified pre-owned car (CPO) is a vehicle that has been certified according to a specific set of manufacturer standards and resold at a manufacturer-branded dealership. This means it gets the benefits of manufacturer warranty coverage, and it is likely in a far better condition than your traditional used car. A licensed automotive technician will inspect these vehicles to identify any issues they may have. In addition, these techs will often get a vehicle history report to ensure that the car has not been involved in any accidents; that way, they can identify whether it could have hidden damage. After the inspection, the CPO car is repaired to get them as close to perfect condition as possible, after which it is sold.

Certified used cars take much of the guesswork out of purchasing a used car. By acquiring that manufacturer certification, you can be far more confident in the vehicle's actual condition. With private sales, you only have the seller's word, though you can also choose to get your own vehicle history report. This process is all handled for you when you decide to go with a CPO through a branded dealership.

A certified pre-owned vehicle can also come with several benefits you won't be able to get through a private sale. For example, a CPO can help you avoid common car scams like odometer rollback and title washing, get a better warranty, provide leasing options, and even give you free maintenance for a specific period of time.

What is the Difference Between a Certified Car and Used Car?

A CPO car and used car have something in common: they both have had at least one previous owner. The difference between a certified pre-owned car and a regular used car is the process the vehicle goes through prior to sale. If you are lucky, a used car will go through an inspection and come with a complete history for you to look at. The unfortunate reality is that many sellers will omit certain facts about a vehicle to raise the sale price. With a regular used car, you can fall prey to scams like:

• Odometer Rollback
• Title Washing
• Lemon Sales
• Vehicle Tampering

With a regular used car, you have to trust the word of the salesmen or do extensive outside research to verify each vehicle's details. With a certified used car, you can rest easier knowing a manufacturer has not only inspected the vehicle, but repaired it to the best condition possible.

Which type of vehicle you choose to buy will depend on a few factors:

• Your Budget
• The Type Of Car You Want
• Whether You Want Financing Options
• What Type Of Benefits You Want
   

How to Buy a Certified Pre-Owned Car in 3 Steps

With a wide variety of benefits and higher quality standards, buying a certified pre-owned car is an excellent option for anyone in the market for a used vehicle. Unlike buying a traditional pre-owned vehicle, which can involve endlessly searching through classified ads and dealing with shady sellers, buying a CPO car can be simple. Here are three steps you can follow to purchase your own certified used car.

Step #1: Decide What You Want

Before buying any type of used car, you’ll want to decide what kind of car you are looking for. This decision will likely be based on a few factors, including:
What Size Your Budget Is: Calculating how much money you have for your certified used car purchase will give you a range to search within.
What You Will Be Using the Car For: Decide why you need this car. Will it be for commuting? Delivering items for a business? Driving for a ride-share service? Your vehicle’s purpose will likely dictate what kind of CPO car you choose.
What Features You Want the Car to Have: Some of these features will be based on your answers to the previous question and your personal tastes. For example, suppose safety is a priority for you. In that case, you may want a car with advanced safety features like a backup camera, automotive emergency braking, blind spot detection, and collision warning systems.
How You Plan to Pay For the Car: You'll also want to decide whether you plan to purchase a CPO car outright or finance it through a lease or loan. With a car lease calculator and loan calculator, you can calculate your loan payments ahead of time to make sure they fit into your budget.

You can also write up a list of specific makes and models you like and narrow down the manufacturers you will search for. Certain manufacturers will offer vehicles that are more fit for particular uses. If you intend to have a lot of passengers, for example, you’ll want to look for brands that provide CPO vans or SUVs.
From here, you’ll need to see what certified pre-owned cars are available from those brands.

Step #2: See What Cars are Available and What Those CPO Programs Offer

Once you have a rough idea of what you are looking for, it’s time to do some research. You can search for certified used cars from your chosen manufacturers through several avenues, including:

Online Marketplaces: Many online vehicle dealerships will allow you to peruse their inventory and find the car you want. Sites like Kelley Blue Book, TrueCar, and Carvana all offer certified pre-owned cars; by looking online, you can save yourself the trip of heading into a brick-and-mortar dealership.
Branded Dealerships: Manufacturers will have franchise dealerships that offer certified pre-owned programs. While it may seem like a pain to visit a store in-person, staff at these locations can help walk you through the purchase process. Check to see if there are any branded dealerships in your area, and head on in to see what offers they are currently running.
Purchase a Former Rental: Rental car companies like Enterprise and Hertz will also sometimes offer certified used cars, but this may not be your best option. Rental cars experience a significant amount of wear and tear over their lifetime. Even with the repairs CPO cars undergo, you may still need to take these vehicles to the shop sooner rather than later.

You’ll also want to look into what these CPO programs offer and compare a few to see who offers the most benefits. Some dealerships may not give you any bonuses for purchasing a certified used car, while others can come with additional benefits like free maintenance, extended warranties, and roadside assistance programs.

Step #3: If You Can, Negotiate!

If you plan to go into a dealership, you’ll often have the option to negotiate on some of the finer points of your CPO car purchase. Certified used cars can be significantly more expensive than a regular used car, so haggling can make that price tag easier to accept.

Check for CPO Programs: First, see what they offer with their program before you agree to a purchase. Ask if they have any benefits for taking part in their CPO program. Try to get the most benefits possible, and take advantage of any savings these programs can provide.

• Do they provide a loaner car if your vehicle is disabled?
• Do they have a free-maintenance period following purchase?
• Do they give any free trials for specific services?

Ask About Financing: Then, you'll want to talk about budget and financing. While some dealers won't be willing to haggle on price, others will. If a CPO car is a bit outside your budget, see what you can do to reduce the cost. Talk to the dealer about financing if you find a perfect certified used vehicle but can't afford the total sales price. Certain CPO programs will give you special financing if you inquire, and you may be able to get better rates or lower premiums. Once everything is set and you've decided on a price, all you must do is drive off the lot!

Are Certified Pre-Owned Cars Worth It?

A certified pre-owned car, or CPO, is one of the best options you have when seeking a used vehicle. These cars have to meet a strict level of criteria to acquire manufacturer approval; that, along with the extra options offered by dealerships with these cars, means they have many advantages over cars bought through private sellers. Here are four benefits you can get if you choose to purchase a certified used car.

Benefit #1: Can Help You Avoid Getting Scammed

When you buy a regular used car, you'll need to discern whether the seller is honest about the vehicle's condition. Unfortunately, there are a number of vehicle scams that private sellers will use to pass off a less-than-quality car, including:

Odometer Rollback: By rolling back the odometer on the vehicle (either mechanically or electronically), unscrupulous sellers can artificially reduce the number of miles on a vehicle. The higher the actual mileage on a car, the more likely it is to need major repairs in the near future. With a CPO car, you can ensure that the mileage on the car is accurate.

Title Washing: A vehicle with a clean title will almost always bring in more money than one with any other title type. Because of this, scammers will "wash" the titles of salvage cars by transferring them to a different state after an accident or significant damage. Some states have laxer laws when it comes to titling, and by acquiring this clean title in a lax state, title washers can unload a car for a far higher price.

The "Lemon": One of the oldest scams, a lemon car is a vehicle sold with a significant defect or potentially malfunctioning components without the buyer's knowledge. There could be issues with the engine, transmission, brakes, lights, or any other major system; in an effort to get more money, the seller will neglect to share this information. By making basic repairs to the car so that it appears driveable, these scammers will sell the car and be gone before you can discover the issues.

Buying a certified used car helps you avoid these pitfalls because they have to be certified by the manufacturer. CPO cars are inspected before certification, and any issues with their internal components have to be fixed to meet a certain criteria level. The manufacturer is giving this car their seal of approval, so any issues or hidden damage the customer finds could damage their brand.

Benefit #2: Almost Always Guaranteed to Get a Car in Excellent Condition

As defined by Kelley Blue Book, vehicles that get a CPO certification will almost always be in "excellent" condition. With regular used cars, you may get a vehicle in any of the four primary conditions, which include:

Poor: Vehicles in poor condition, like those with a salvage title, are usually not drivable at all. They will have severe issues with their internal components, significant wear-and-tear, high mileage, damaged interiors, rust damage, and will not have a clean title.

Fair: Vehicles in fair condition will function slightly better than poor cars but are still likely to have significant issues with their internal mechanics. These cars will also have cosmetic damage and need a decent amount of automotive repairs. Unlike poor vehicles, they will have reasonable running conditions and should have a clean title.

Good: Cars in good condition may have minor cosmetic damage but will be free from any significant technical issues. They may require a small number of repairs, but overall most of the damage is in the form of minor rust, small scrapes on their paint, and a bit of wear on their tires.

Excellent: Like most CPO cars, those in excellent condition will feel almost "like-new." They should function perfectly, require no repairs, pass a strict inspection, and have a clean title.

CPO cars allow you to avoid assessing a car's condition due to the required multi-point inspection. A professional automotive technician will inspect the vehicle to ensure it meets the manufacturer's criteria before certifying it and ensure it has a clean vehicle history report.

Benefit #3: Often Comes With a Better Warranty and Leasing Options

Most CPO programs will provide an extension to the basic warranty a vehicle comes with, along with additional options like a powertrain warranty. While the terms may be a bit shorter with lower mileage limits, these extended warranties can give you a guarantee of repairs that a private seller just can't match.

Certified used cars are also often available for lease, offering a way to make monthly payments and switch out the car after a few years if you so choose. This is an excellent option for drivers who want to try a vehicle out or wish to drive a car that is a bit too expensive to buy outright. You can calculate your lease payments ahead of time with a lease calculator to see if they fit your budget, like the one available from GoodCar.

Benefit #4: Dealerships Offer Free Maintenance and Fringe Benefits

Certain dealerships will offer free maintenance if you buy a CPO car, ranging anywhere from a few months to a few years after the vehicle is purchased. General Motors, for example, offers two years of complimentary scheduled maintenance after purchasing any Buick, GMC, Cadillac, or Chevrolet CPO vehicle. What these programs offer varies, with some offering free vehicle inspections, tire rotations, and oil changes.

You may also get fringe benefits with a CPO car, like roadside assistance. If you get in an accident or your vehicle becomes disabled due to equipment failure, these programs will help pay for emergency towing, getting your battery jumped, and flat tire changes. Assistance programs vary in length. For example, Acura has two levels: Precision Certified and Precision Used. A Precision Certified vehicle will get assistance for two years or the first 100,000 miles, while a Precision Used CPO car will only be covered for one year and 12,000 miles.

Several Drawbacks of Certified Used Cars

Smaller Option Pool: Making sure that a vehicle meets the requirements set out by a manufacturer means going through a rigorous inspection.Because of this, the pool from which you can choose your vehicle will be significantly smaller than the private market. Therefore, going the CPO route may not be the best for buyers with their hearts set on one type of car.

Higher Sticker Price: There are several reasons CPO cars carry higher price tags than traditional used cars: for one, the inspections they undergo aren’t free. A multi-point inspection takes time and must be facilitated by a licensed automotive professional. Depending on the brand, these inspections could include 300 different individual points of criteria. After the inspection, the vehicle is then repaired at the manufacturer’s expense. As a result, you can expect to pay between 2% and 10% more for a certified used car than a regular used vehicle.

Where Can I Find More Information about Certified Pre-Owned Cars?

The best way to find more information about CPO cars is with a service like GoodCar. GoodCar can give you access to vehicle history reports and other data that will show you valuable data about any available vehicle. While many CPO cars will come with a manufacturer’s stamp of approval, it’s still good to learn more about that vehicle’s history of ownership. By doing research ahead of time, you can get a higher-quality car.

You can also avoid falling victim to a car-buying scam, like odometer rollback, lemon cars, and car title washing. Without knowing a car's history, it will be difficult to confirm its actual mileage or whether it's ever been in an accident. Scammers will take advantage of this and lie about a vehicle's actual condition. With a vehicle history report, you can confirm any information a seller provides or challenge any details you find suspicious.