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Certified used cars
The Truth About Certified Pre-Owned Cars
Understanding this alternative to buying a traditional new or used car
Buying a used car can save you money and get you behind the wheel of a more luxurious model than you could afford to buy new. For those looking to lease a new car, buying a used model outright can provide cost savings and eliminate the mileage restrictions of a lease. But some people are afraid to purchase a car with a mysterious past, which is why automakers created the “certified pre-owned” designation.
“CPO vehicles are often cherry-picked, have lower miles, and are cleaner vehicles with a clean history,” says Anil Goyal, senior vice president for Black Book, an auto-industry data aggregator. “They’re also protected against defects and expensive repairs by an extended manufacturer’s warranty.” CPO cars may also pass a multipoint inspection to check for systems or components that may be in need of repair.
Manufacturers typically offer a handful of other perks, including free loaner cars, roadside assistance, free satellite radio (for a limited time), and discounted finance rates on loans.
These can all be great benefits, but buyers will ultimately pay for them: CPO cars cost more than a regular used car, even one with similar mileage. “The average premium for a 3-year-old midsize car is about $850,” Goyal says. “For a luxury car, the average premium is about $3,000.”
Searching for a used car? Try our used-car marketplace to search by make, mileage, and other filters to help you zero in on models in your area.
Keep a Healthy Skepticism
Dealers tout CPO cars as the better choice because of their extended warranty, near-mint condition, and savings over buying new. But CR’s auto experts say that a regular used car can be a better value.
“Buying a CPO car is basically purchasing a pricey extended warranty for peace of mind against unexpected issues,” says CR automotive analyst Mel Yu.
Instead of paying a premium for a certified used car, CR’s auto experts say that consumers looking for the best value should save their money and use our list to find a noncertified used car that’s likely to be reliable. They can then put aside the savings to cover any repairs that might crop up.
If a noncertified used vehicle is still covered by its original warranty, the buyer can purchase a factory-backed extended warranty at a negotiated price, but CR’s auto experts say that in most cases this is not a smart investment.
Before buying any used car, always have it inspected by a trusted independent mechanic who can confirm that all the systems and components are in order and detect any damage or hidden repairs. Be forewarned: CR has run across certified pre-owned cars that were not properly inspected or that turned out to have hidden damage.
Other precautions to take: Do an internet search of the full VIN (vehicle identification number) to see whether any revealing information pops up, enter the VIN at safercar.gov to check for open recalls, and purchase a vehicle history report from a provider such as AutoCheck or Carfax. (Though it can be a helpful tool, bear in mind that a clean history report is not a guarantee that the vehicle has never been in an accident.)
This do-it-yourself approach may be all the certification you need.
Editor’s Note: This article also appeared in the April 2018 issue of Consumer Reports magazine.
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