What is a Certified Pre-Owned Vehicle and Should you Buy One?

by James Hamel

When Certified Pre-Owned automobile programs were first brought to the market years ago we, as automobile consumers, were still given no choice but to deal with the whims of the stereotypical “sleazy, polyester tie wearing used car salesmen” with little or no protections from their tricks. Back then, even if the “cherry used car” this individual forced you to test drive couldn’t go faster than 40 miles per hour without smoke pouring out of the exhaust and the rear view mirror fell off in your hands when you tried to adjust it, if you chose to buy a used car from most any dealer lot you had no protection or guarantee once you drove off the lot.

You’re probably asking yourself “Should I buy one?” Well, ladies and gentlemen, you no longer need to be afraid to dip your toe into the dangerous waters of the used car sales lot. Because with most car manufacturer’s now offering comprehensive Certified Pre-Owned programs you can still get all the benefits of a new car (warranty, intensive pre-sale inspection, replacement of any worn parts like tires or brake pre-sale) all the while basking in this new era of the “long sleeve shirt, Armani-clad metrosexual salesperson.” Okay, maybe we are just dreaming about that last part.

We may have fallen asleep in Economics class but we would think it is also very important for the health of these manufacturers to have their Certified Pre-Owned programs succeed as they help them make money off vehicles that have been leased for a few years and then returned. Certified Pre-Owned vehicles also have a huge profit margin inherent in their sale prices for these vehicles due to the fact that they offer so much more and are in better shape so these programs help keep dealerships in business, as well.

Definitions

What is a Certified Pre-Owned Vehicle? Certified Pre-Owned vehicles are, simply put, used cars that have been inspected and guaranteed to be better than other used cars at a dealership. While there are some Certified Pre-Owned programs at unaffiliated used car lots, the majority of them are backed by major auto manufacturers. These manufacturer programs usually require that their Certified Pre-Owned models be under a certain age/mileage, are in good condition and have no salvage/write off claim. Usually these love mileage lovelies are taken from the automakers returned lease vehicle fleet and have evidence of having been maintained regularly.

As a thank you for buying their Certified Pre-Owned vehicle, automakers usually extend the warranty anywhere from 1-3 extra years. While the inclusivity of a Certified Pre-Owned program varies (some will change your oil and brakes if they feel they are under 50% evaluated life left), each and every program offers the rather confusing “multi-point” inspection as the proverbial dangling carrot. In all seriousness, however, the multi-point inspection is nice to have had done but it is in the warranty extension where Certified Pre-Owned programs finally demonstrate their true value.

Differences in Terms

The binding definitions and parameters of a Certified Pre-Owned program with a car maker can vary from manufacturer to manufacturer. For example, BMW gives its Certified Pre-Owned (or “CPO”) buyers a warranty coverage extension to a total of 6 years/100,000 miles from the initial date of purchase.

This generosity is also used as an incentive for people to buy BMW’s off-lease vehicles as most of their new vehicles are leased, not sold. As an added bonus, BMW never stops honoring the original 4 year/50,000 mile free servicing feature that so many new car lessees have found so appealing.

While German cross-town rival Audi offers a CPO program with near identical terms to that of BMW, Mercedes Benz is far less generous. As an example of how these programs can differ in value, Mercedes only extends the warranty on their Certified Pre-Owned for an extra year or 12,000 miles. While that may not be a deal killer for fans of the three pointed star, it really isn’t very competitive with other luxury Certified Pre-Owned programs.

Shop Around

Most every automaker offers a CPO program and their websites usually allow you to search for the exact Certified Pre-Owned model you want to buy at the dealer nearest to your home. One last thing to remember—although there are plenty of new car deals out there right now sometimes it is often times wiser from a financial point of view to buy that “lightly used” creampuff with the giant “Certified” sticker on the windshield. Just make sure your salesman isn’t wearing polyester.

photos by James Hamel and Tina Smith