Certified Pre-Owned (CPO) vs Used - What's Better?
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Certified Pre-Owned (CPO) vs Used - What's Better?

By Autolist Editorial | September 28, 2020

Although some car buyers are willing to pay more to enjoy that new car smell, savvy buyers often seek to avoid the first-year depreciation that comes with purchasing new. However, buying a previously owned vehicle means you need to decide between a certified pre-owned car or a used one. Here are a few guidelines for choosing the vehicle that's right for you.

Advantages of Certified Pre-Owned Vehicles

Perhaps the most significant advantage of certified pre-owned vehicles versus used vehicles is their warranties. The length of the warranty and what it covers varies by manufacturer. Ford, for example, has a one-year or 12,000-mile bumper-to-bumper warranty that covers more than 1,000 parts. These warranties are offered in addition to the original manufacturer's warranty, which can be transferred when you make the purchase.

Also, dealerships know they'll need to cover some costs if the vehicle has problems. Because of this, they perform extensive inspections beforehand to ensure the vehicle is in good condition, both mechanically and cosmetically. Honda, for example, has a 150-point check on all pre-owned vehicles they certify. CPO warranties can offer easy fixes if you run into trouble. Buyers might want to look at the perks as well. Toyota provides free roadside assistance for a year on its CPO vehicles. Such perks are unavailable on non-certified cars.

Above all, certified automobiles offer excellent peace of mind. It's stressful to buy a vehicle, and buyers often fear that their new vehicles are likely to encounter significant problems shortly after purchase. Although certified vehicles sell at a higher price than their used counterparts, buyers might view the extra fee as valuable insurance.

Advantages of Used Vehicles

Although CPO vehicles are much cheaper than new cars, they often cost hundreds or even thousands more than similar vehicles that aren't certified. Buyers who want to save money may find that used cars offer better value. Modern vehicles generally have high reliability, even if they're used. Besides, used cars from recent years might still have some of the manufacturer's warranty remaining. For some drivers, this is assuring enough to forego the added warranties of certified cars.

Because they only offer certification on new vehicles in good condition, dealers can ensure they'll make a profit in the certification process. However, buyers can often find the most savings by opting for an older vehicle that's at the end of its warranty or close to it. Used cars give you more options to choose from, and older vehicles for sale today offer excellent reliability compared to vehicles from past decades. Buyers interested in the broadest selection possible might opt for used vehicles. Additionally, certified vehicles are only sold at dealerships. By looking at used cars versus certified cars, buyers can also shop with private sellers and used car dealers.

Buyers can also offset some of the advantages of buying a CPO car. Taking the vehicle to a mechanic you know and trust, for example, can help you feel confident in your purchase. There are also tools for buyers to learn about the vehicle's history. A vehicle history report from CarFax or another service can tell you if the vehicle previously experienced significant problems. Although it might be tempting only to consider CPO cars, the extra cost might not be worth spending.

Reasons to Choose a Certified Pre-Owned Car

In some cases, the extra cost of a certified pre-owned car is worthwhile. Luxury cars tend to be more expensive to repair, and they aren't always as reliable as their less expensive counterparts. BMW, for example, offers a one-year, unlimited miles limited warranty that starts after the initial four-year new vehicle warranty ends. Because BMW vehicles are some of the most expensive to repair and have a reputation for needing more repairs than other brands, paying the premium for the extended inspection and warranty often makes sense.

Doing some research can also help you come to the right conclusion. If a particular make and model has a poor reputation for reliability, car buyers should consider the extra protection that comes with pre-owned certification if the added cost is low enough. You should also think how hard you are on your vehicle. Locations with extreme weather conditions can be tough on cars, making repairs more likely. Consider how much time you spend in stop-and-go traffic, which is harder on vehicles than highway driving. In some cases, the extra cost of a certified automobile might be less than the price of a single repair job.

Reasons to Choose a Used Car

When looking at monthly payments, it can be easy to justify the extra cost of certified pre-owned vehicles. However, saving money by selecting a standard used automobile can let you purchase a better model or a higher trim level. If the cost of a certified pre-owned Honda Civic is the same as a slightly older, non-certified Accord, for example, it might be worth going with the Accord. All drivers should earmark some of their savings for auto repairs. If you're comfortable in your repair bill budget, you can view buying used as a calculated and potentially logical gamble. If you don't need repairs that the warranty would have covered, you'll save money.

A trusted mechanic might be able to offer buying advice if you bring a vehicle in for an inspection. If based on your mechanic's experience, the price is fair and the vehicle seems to be in good shape, you can feel confident that you're making a wise purchase. Buying used doesn't necessarily mean you'll need more repair work in the future, and purchasing a used car with a reputation for reliability might be a safer option than choosing a troublesome vehicle that's certified. Furthermore, dealerships only sell CPO vehicles that look like they're almost new. If you can handle a few scratches or dings, you might be able to find a better deal.

What's Right for You?

Before starting the car buying process, take into account your financial status. If you can cover the cost of significant repair work, you might want to focus primarily on used automobiles. On the other hand, if you need time to build your car repair budget, you might want to buy a certified car with a strong warranty.

Unless you're set on a particular year, make and model, consider looking at both CPO and used vehicles. Finding a great deal is much easier if you open up your search criteria. When purchasing a car, patience is your most valuable tool. If you're willing to negotiate, you might find a dealership that's willing to sell a certified pre-owned vehicle at a cost similar to a used one. Furthermore, dealerships sometimes run out of space for cars and might be ready to come down on the price to clear lot space. Similarly, private sellers and used car dealers sometimes sell at a lower cost to move cars more efficiently. Dealers with packed lots and private parties who need to sell quickly might offer you an unbeatable deal.

Cars manufacturers and dealerships face fierce competition from their rivals. When designing certified pre-owned programs, they crunch the numbers to ensure they both offer a competitive deal and can make a profit off of the process. In general, CPO programs offer a short warranty, a thorough inspection and repair work. You can save money by foregoing these advantages, but you might find the peace of mind and extended coverage to be worth the premium.