What Does Certified Pre-Owned Mean?
A certified pre-owned vehicle (CPO) is a car that has been inspected and repaired as needed before resale. CPOs also come with extended warranties and other added perks.
Still, like any financial decision, buying a CPO car has its pros and cons. Before you head to the dealership, here’s what certified pre-owned means and how it works.
What is a certified pre-owned car?
A certified pre-owned car is a car that comes with manufacturer backing. CPO models are usually inspected by a mechanic and undergo any necessary repairs before they’re sold.
After the inspection, the dealer may also provide some additional warranty coverage for the vehicle, beyond what the factory warranty has.
Each automaker has slightly different criteria for what it takes to be included in its program, but typically, CPO cars have to meet certain benchmarks in terms of age, mileage and overall condition. This helps dealers keep costs down by limiting the number of repairs needed before the car goes up for resale.
Since a CPO vehicle is usually in better condition than the average used car at the time of the sale, it may also come with a higher price tag.
Certified pre-owned cars vs. used cars
All certified pre-owned cars are used cars, but not all used cars are certified pre-owned.
Basically, CPO vehicles are subject to more regulation than other used cars. A CPO car comes with a guarantee that the vehicle has gone through an inspection and reconditioning process before it was sold.
Extended warranties may also be available, which can be reassuring if you have problems with the vehicle later on.
When buying a regular used car, there is no such guarantee. The average used car isn’t usually inspected and sent in for repairs. You might not receive a vehicle history report to let you know if it’s been in an accident or had a rough driver in the past. Plus, it’s unlikely a used car will come with any kind of warranty.
Buying a regular used car is more of a gamble, since without the backing of a CPO certification, there’s always a chance that you could be buying a lemon. But if you’re willing to take that risk, you will likely save some money.
Read more about getting a loan for a used car.
Pros and cons of buying a CPO car
Now that you know more about what it means to buy a certified pre-owned car, you’ll want to weigh the pros and cons.
| Pros | Cons |
|---|---|
Peace of mind: You’ll have the added reassurance of knowing that your vehicle went through an inspection and reconditioning program. Financing options: Dealers are able to offer leasing and financing options that you wouldn’t be able to get if you had bought from a private party. Additional benefits: Sometimes CPO programs will come with added perks, like roadside assistance or a free satellite radio trial. | Added cost: You’ll likely spend more buying a CPO car than you would buying a different used vehicle. Some risk: No guarantee is airtight, and you could still have problems with a CPO vehicle. You’re just minimizing the risk. |
Are certified pre-owned cars worth it?
At the end of the day, the decision of whether it’s worth it to buy a CPO model is a personal one.
Some buyers don’t mind spending a little bit more to have the added reassurance that the vehicle is in good condition before they head out on the road. For others, that peace of mind may not be worth the added cost.
If you’re thinking of buying a car that’s certified pre-owned, be sure to do your research on the dealer’s CPO program. Since no two programs are exactly alike, knowing what you’ll get for your money may help you decide whether it’s worth the cost.
Looking to buy a car? Learn more about our top auto loan picks.