Key takeaways
- Certified pre-owned vehicles come with the added assurance of a trusted history, at a cost slightly higher than a basic used option.
- Having a vehicle inspected by a mechanic before purchase is one of the best ways to ensure you get a quality vehicle, even if it’s CPO.
- Finding perfect financing for your CPO requires the same care you would take when buying a new or used option.
Certified pre-owned (CPO) vehicles are a great option for anyone looking for a quality car without the new car price tag. But are certified pre-owned cars worth it? Yes. These used vehicles have to meet additional standards from manufacturers or dealers. Buying a certified pre-owned car offers several benefits, including extended warranties and lower overall costs.
Certified pre-owned cars are worth it — here’s why
Certified pre-owned vehicles are returned leased vehicles or newer trade-ins. They are typically sold at less of a markup than new vehicles, though they tend to cost more than the average used option. Despite the markup, they may come with factory-backed warranties and the peace of mind that a reputable dealership provides. According to recent data from Consumer Reports, CPO vehicles have consistently fewer mechanical issues than other used options — so the higher price tends to pay off in the long run.
Extended warranty
A certified pre-owned vehicle may come with an extended warranty. The warranty may include a limited powertrain warranty covering the engine, transmission and drivetrain components and a limited bumper-to-bumper warranty covering components of the body and interior.
Check to see how long the vehicle warranty lasts and ask about any warranty exclusions. Look for a list of components that aren’t covered — like tires — under the CPO warranty. If the vehicle has electrical components that require a lot of maintenance, like brake and tire wear sensors, ask the dealer if the warranty will cover replacements.
Better value
Another benefit of buying certified pre-owned is that it generally lowers the vehicle’s overall cost over time. This is because the dealership has checked the vehicle, and it comes with a warranty. Both of these can lead to a lower total cost of ownership.
You won’t have to worry about future mechanical issues or repair costs as much as you would with a used car that isn’t certified. This will allow you to focus more on the vehicle and less on potential hidden problems.
Exchange programs
Depending on the manufacturer and dealer, you may be able to return the car within a certain amount of time if it doesn’t meet your expectations. This isn’t available for all CPO vehicles, though, so check with the dealer before signing on if you want this feature.
5 steps to buying a certified pre-owned car
To find a quality certified pre-owned car, you’ll want to follow similar steps as buying any used car.
Step 1: Do your research
Start by considering what you truly need in a car: competitive gas mileage, lots of space or just something simple to get from point A to point B. Once you know your needs, start looking for models that both meet those needs and fit your budget.
Research prices for different vehicle options and check sites like Kelley Blue Book (KBB) and Edmunds to see current prices. Pay close attention to any features you value, like backup cameras, seat temperature controls or towing ability.
Once you know what vehicle you might want, check out the CPO programs offered by the manufacturer or dealership of your choice. Consider the following factors.
- Vehicle age and mileage: Programs set a maximum age and mileage for vehicles they’re willing to certify.
- Vehicle warranty: Do vehicles in the CPO program come with a free factory-backed extended warranty?
- Inspection process: What does the CPO inspection include?
- Vehicle history: Is it made available to potential buyers?
- Available discounts: Does the manufacturer offer special incentives, like 0 percent APR?
Step 2: Shop for it
There are many places to find certified pre-owned cars, such as franchise dealerships, rental companies, online dealers or CPO-specific dealerships. After you narrow down your choices, it is time to shop. If you have a solid idea of the type of vehicle you want, heading directly to the franchised dealerships is your best bet. Otherwise, shopping online allows you time to compare options with tools offered by Edmunds and KBB.
In the news
Toyota made headlines earlier this year for expanding its CPO program to include a new “silver” tier. These vehicles are up to 10 model years old, with up to 125,000 miles. Previously, Toyota’s CPO program only included cars up to six model years old or 85,000 miles; these vehicles are now the “gold” tier. The addition is a nod to the brand’s pride in longtime vehicle reliability and also points to an uptick in demand for CPO vehicles in recent years.
Step 3: Check the inspection report
One of the main perks of buying a CPO car is knowing they’ve been thoroughly inspected. Requesting and reading the inspection report before purchase can give you extra confidence. The report should detail any previous accidents, damage or mechanical problems. Trusted dealers perform inspections that should cover the following:
- Road testing
- Interior/exterior damage and overall wear and tear
- Vehicle tires, rims and wheels
- Under-the-hood components
- Brake fluid and coolant
Bankrate tip
While an outside inspection by a third-party mechanic isn’t strictly necessary, it’s still smart to have an unbiased professional inspect any used vehicle. If the seller pushes back at this request, consider shopping elsewhere.
Step 4: Take a test drive
Get behind the wheel for a test drive. Take the time to see if you can picture yourself driving this vehicle for years. How does the seat feel? Does accelerating make any strange noises? Will your furry friend fit comfortably in the back? Make sure your purchase will fit into your life.
Step 5: Get funding
An auto loan may make CPO cars’ higher price tags more accessible. Researching auto loans in advance can help you to ensure you’re locking in the lowest certified pre-owned interest rate for which you can qualify. Even if you have fair or poor credit, some lenders deal specifically in bad credit auto loans.
Either way, don’t hesitate to negotiate on rates and price. If you walk in the door with a preapproved auto loan, a firm budget and a good idea of what you’re looking for.
Step 6: Complete the purchase
It’s time to sign the paperwork and make the vehicle yours. Come equipped with any information you learned from the inspection and use it as leverage to get the best deal on your used car. And look out for dealer options the seller might try to add on that aren’t always worth it.
Bottom line
Purchasing a certified pre-owned car involves research and planning, but with some patience, you can get a solid car at a great price. Once you find the right fit, qualify for financing before you sit down to finalize the purchase. Coming in with an auto loan lined up will give you even more room to negotiate price.
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