Certified Pre-Owned vs. Used: Pros and Cons

A certified pre-owned and used car have something in common: they both have had at least one previous owner. The difference mainly lies in what happens to these vehicles before they are put up for sale. The process of certifying a vehicle usually involves bringing the car up to a standard the manufacturer sets. Meeting these standards requires an inspection followed by repairs, which means CPO cars are, on average, of a higher quality. With a regular used car, there is no guarantee that the seller has taken the vehicle in for an inspection. That being said, both types have their own advantages and disadvantages.

Certified Pre-Owned vs. Used Cars

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

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

Con: You’ll Have Fewer Options

Making sure that a vehicle meets the requirements set out by a manufacturer means going through a rigorous inspection. These multi-point inspections, which include hundreds of different criteria, ensure that a car is in the best condition possible. 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.

Con: Prepare to Pay a Higher 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 CPO than a regular used vehicle.

Pro: Your Car Will Go Through a Multi-Point Inspection

For a car to be certified pre-owned, it has to pass a multi-point inspection designed by the manufacturer. Yes, this means fewer cars will pass certification; while the options may be more limited, it does help ensure the vehicle is held to a higher standard. CPO cars will also often be newer and have lower mileage, which means they've experienced less wear and tear. Generally, an automotive tech will get a vehicle history report prior to this inspection. These reports show whether the vehicle has been in any major accidents, how many previous owners it’s had, and what types of repairs it’s undergone. All of this combines to make CPO cars a better quality used vehicle purchase.

Pro: You Get a Warranty with Your Purchase

Unlike a used car purchased through a private sale, CPO cars will come with a manufacturer’s warranty. These warranties will cover certain repairs for a set time after purchase. So once you notice an issue, all you have to do is take your car to the nearest dealership. If the damage falls under the warranty’s coverage, the dealership will take care of all repairs for free. A good warranty can help reduce the financial burden that major automotive repairs usually carry, helping you reduce your overall vehicle costs.

Pro: Initial Costs Will Be Lower than a CPO Car

Certified pre-owned vehicles usually have to meet certain standards to be approved by a manufacturer, which adds to the overall costs. These vehicles have been extensively inspected and repaired to meet strict criteria; a portion of these costs are passed on to the buyer. While you will usually have the option to get a lease or loan and make monthly payments, CPO cars can still be hundreds or thousands of dollars in total. Private sellers are also more willing to haggle, and you can sometimes find better deals through a marketplace or by asking around in your social circles.

Pro: There Are More Available Vehicles, So You Have More Options

The used vehicle market is enormous, and most cars available for sale are not certified pre-owned vehicles. Because of this, you won’t have the same pool of cars to choose from. While this isn’t an issue for everyone, some people have particular tastes and ideas for what they want to drive. If you are pickier and would like a wide variety of vehicles to choose from, buying a CPO vehicle may not be for you.

Con: Won’t Be Able to Lease (Through Private Seller)

If you buy your used car through a private seller, you won’t have the same financing options as you would with a certified pre-owned vehicle. With a CPO car, many dealerships will offer leases or loans to make the higher cost more palatable. Instead of paying the total sale price of a vehicle upfront, you can spread this cost out and make affordable monthly payments. If you choose a lease, you also have the ability to switch out your vehicle after your terms expire. With a lease calculator and loan calculator, you can calculate lease and loan payments ahead of time to ensure they fit into your budget.

Con: No Warranty or Fringe Benefits

For the most part, a regular used car will no longer be covered by the manufacturer's warranty. Not having a warranty means that if an issue arises with the vehicle's internal mechanics, you'll need to pay the total cost for any necessary repairs. You also won't get some of the fringe benefits that dealerships offer with their certified pre-owned vehicles. Some programs will give their buyers free roadside assistance for months or years after purchase, while others will include free maintenance for a set period after a sale is finalized.

While it's true you will have more limited options and likely have to pay a higher price, the pros outweigh the cons for CPO cars. You can spend time searching through classifieds to see if there are any diamonds in the rough, but for the most part, choosing a certified pre-owned vehicle will save you time and money in the long run.