The most rapidly expanding brand in the automotive industry isn’t Ford, Honda, or Toyota – or any other name you might think of - it’s the Certified Pre-Owned Vehicle!
CPOs are used vehicles that have been certified by brand-authorized authorized dealerships (as opposed to non-franchised dealerships) using a strict inspection process and following stringent guidelines. The CPO first came onto the scene in the 1990s when Lexus and Mercedes-Benz began their first CPO programs, now there are over 30 manufacturers offering Certified Pre-Owned programs. From its start, the market for Certified Pre-Owned Vehicles has grown exponentially, in 2013 franchised dealerships sold over 2 million units of CPO inventory, and the 2014 projections promise another great year for CPO sales.
So, how do used cars become Certified Pre-Owned Vehicles? Though each manufacturer’s program differs, in general, each vehicle cannot be over a certain age (usually 5-6 model years) and has low mileage (usually under 80,000). Often, CPO vehicles are chosen from a dealership’s stock of lease returns, those vehicles are usually more gently used and tend to be newer models with lower mileage than trade-ins. Vehicles bearing a manufacturer’s certification have been vigorously inspected for mechanical, safety, and aesthetic defects by factory-trained technicians so they’re much more reliable than regular used cars that have not been certified. Most certification programs include multipoint inspections (often 150+ inspection areas) that includes diagnostic trouble codes, powertrain/chassis, body frame, and general interior/exterior (seats, arm rests, paint, etc.).
When certifying a vehicle, manufacturers will also attach the CARFAX or Autocheck history report, to ensure there have been no major issues or repairs. CPO vehicles also come with an extended manufacturer warranty for a specified number of miles or amount of time (whichever comes first) that is accepted by authorized, like-branded dealerships nationwide (instead of just the original dealership, as with conventional used cars) if your vehicle needs future service. Used vehicles certified only by a dealership probably won’t have gotten a multipoint inspection and won’t have an attached extended warranty backed by the manufacturer (you would have to purchase a warranty separately). Most factory certification programs vary in how and what they inspect and it can be difficult to navigate through the confusing language of warranties and financing. Websites like CertifiedCars.com offer a fast and easy side-by-side comparison of each manufacturer’s Certified Pre-Owned Vehicle program so shoppers can get a better idea of different inspection processes, warranty limits, and features included like roadside assistance or special financing.
Since Certified Pre-Owned Vehicles are inspected by their manufacturer, they offer the peace of mind of a new car without the hefty price tag. What makes them better than new cars? CPOs won’t lose 20-40% of their value once you drive them off the lot. Unlike used cars, dealerships will allow you to negotiate the price of CPO vehicles much like you would when buying a new car. While they have a higher price than traditional used cars, CPOs often represent your best deal as they have been inspected, repaired (if needed) and are backed by the manufacturer’s warranty (so there’s no need to buy a warranty from the dealership). Certified Pre-Owned Vehicles offer a great alternative to buyers and strike a balance between high-priced new cars and unreliable used cars.
Q: Where can I take my certified pre-owned car for general service and emergency repairs?
A: If a vehicle has been certified by its manufacturer/factory, it can be serviced at any like-branded dealership in the country. If the vehicle was certified by a dealership or independent program (for example, the National Vehicle Certification Program), it will most likely have to be taken to the dealership it was purchased from for service.
Q: How long will my certified pre-owned car’s warranty last?
A: Pre-owned vehicle warranties vary from one manufacturer to another, generally the warranty will extend a pre-determined number of miles or amount of time, whichever comes first (for example 100,000 miles or 6 years from date of pre-owned sale).
Q: What features and benefits are included in my warranty?
A: As with warranties, the features of each warranty differ from one provider to another. Manufacturer certified pre-owned vehicles will include a multipoint inspection and repair process (usually with 100+ inspection points); often a roadside assistance program and special financing are included as well.
Q: Does it matter who certifies a pre-owned vehicle?
A: Pre-Owned vehicles can be certified by either the manufacturer, the dealership, or an independent third party program. However, only manufacturer-certified pre-owned vehicles carry a manufacturer extended warranty included and have been inspected/repaired by factory-trained technicians.
Q: Used or Certified Pre-Owned, what’s the difference?
A: Certified pre-owned cars are generally later models (no more than 6 model years old) and have low mileage (under 80,000). While used cars are cheaper, they have probably not been inspected and/or repaired by a factory-trained technician (inspection/repairs were done by the dealership) and do not carry an extended warranty backed by the manufacturer. Certified pre-owned cars will also have more general maintenance done during their inspection process, like checking the engine or changing brakes, belts, and filters. Used cars usually will only have cosmetic repairs/maintenance done, for example, fixing a crinkled fender or filling paint scratches.