CPO Cars In A Nutshell - What Do Certified Pre-Owned Cars Really Offer A Used-Car Buyer

Certified Pre-Owned Vehicles do have added value. Here’s what you get for the extra money.

As the global pandemic obliterates the car industry as we know it, many former new-car shoppers will soon turn their attention to used cars. Used cars are less expensive by double-digit percentages even when relatively new. The huge depreciation most cars suffer within even one year of being sold can be avoided by a savvy shopper. But what if the used car has a big-ticket problem? This is where the certified Pre-owned industry started. Dealing with that uncertainty.

A certified pre-owned car (CPO) is a used vehicle that an authorized dealer of the brand has “certified.” A CPO car comes with an extra added warranty that a used vehicle of that same year, make, model, and mileage does not. There is also some promise that your CPO vehicle has been specially inspected and prepared.

CPO Advantages In One Paragraph
In a nutshell, a certified pre-owned car offers some assurance that the vehicle you buy won’t stick you with a bill for a new engine, new transmission, or new anything expensive for a set period of time. The primary value – perhaps the only value – CPO cars offer is a warranty backed by the automaker themselves – not a third-party.

CPO Costs
Buying a certified pre-owned car will cost you a bit more than the same car used would. Our friends at iSeeCars.com have access to big car-buying data. And they have a staff of very smart folks who know how to analyze that data and tease out some useful facts. Last year, they looked at how much higher the average transaction cost was for a CPO car. Although it varies, the iSeeCars data proved two things. First, that the cost adder is meaningful. Second, it is almost always lower than dealing with even a single big repair out of pocket.

CPO By Brand
Every automaker has its own CPO program. They all think theirs is the best. Look closely at the fine print, but focus on the warranty closely. Ensure that you know exactly how long the bumper to bumper warranty offered will last for the specific vehicle you are considering buying will be. If it less than 1 year, walk away. If it is longer than one year, ensure that the automaker’s own normal warranty isn’t already still in effect during that time. Next, find out if the warranty that you get can be transferred if you sell the vehicle. Normally there is a small fee to do so if it can be transferred.

CPO Inspections
We have heard from workers at dealerships that the CPO inspections are not always all they are cracked up to be. Some claim that the inspections are a bunch of malarkey. Who really cares? If the car you buy is warrantied for a year or more, you can have it fixed by the dealer.

CPO – Don’t Ignore Smart Used-Car Buying Practices
Like any used car, you want to know if the CPO you are looking at has a history of crashes. Employ the usual tools to find out. CarFax is a tool. Not perfect, but helpful. Next, look at the maintenance records. Read them. Was the normal maintenance done? Is there a pending big-ticket maintenance requirement pending? Say a timing belt? If so, adjust the value accordingly. If possible, ask your mechanic to look at the car. Finally, check CarComplaints.com and Consumer Reports ratings for the year make and model to avoid wading into a known big issue (Like the Subaru Oil consumption issue, Nissan CVT issue Hyundai engine failure issue etc.)

Certified Pre-owned cars do indeed offer added value. Be sure you do your homework to make certain you get what you want and what is promised. If you have a CPO vehicle, please offer any advice you would have for shoppers in the comments below.

John Goreham is a life-long car nut and recovering engineer. John's focus areas are technology, safety, and green vehicles. In the 1990s, he was part of a team that built a solar-electric vehicle from scratch. His was the role of battery thermal control designer. For 20 years he applied his engineering and sales talents in the high tech world and published numerous articles in technical journals such as Chemical Processing Magazine. In 2008 he retired from that career and dedicated himself to chasing his dream of being an auto writer. In addition to Torque News, John's work has appeared in print in dozens of American newspapers and he provides reviews to many vehicle shopping sites. You can follow John on Twitter, and view his credentials at Linkedin.