Certified preowned reduces your money and gives you peace of mind when buying a used car
There's no reason for automakers to, well, offer incentives for them in this industry. New car prices aren't going down anytime soon, and there're little incentive for carmakers in general to provide incentives. That's pushed many potential new car buyers into the used car market. If you're one of them, consider a certified preowned vehicle.
Automakers offer a less expensive alternative to brand-new cars: certified preowned vehicles, or CPO vehicles. These cars can give you the same peace of mind as new-car owners, but at 50% to 75% of the price of a brand-new car. Learn more about these initiatives and how they may help you and your wallet.
What is a certified preowned car?
A certified preowned car is a pre-owned vehicle that shows minimal signs of being used before your potential purchase. CPO cars are typically off-lease units returned to the dealership where they were initially sold new. The original lessor returns the car often times for a new lease or to purchase something else once the original lease is up.
Get the Roadshow newsletter.
These off-lease cars are typically three years old with fewer than 122,000 miles per year of previous service, but many carmakers won't consider a used car for manufacturer certification if it's more than six years older and has more that 75,000 miles on the clock.
Read more: With these tips, you'll be able to buy a car you can afford with these suggestions.
Because of the mileage restrictions associated with new-car leases, CPO cars are usually well-maintained, damaged-free, and return to the dealer with relatively few miles on the odometer. If a leased vehicle returns in poor condition, the original lessor is forced to pay steep fees to compensate for any damages or extra mileage.
The restrictions placed on the first possessor ensure that the dealer has a steady stream of high-quality used cars to resell, giving the dealership the opportunity to make 5% profit from putting tiling up. Of course, CPO cars may be purchased from standard dealer trades, but for the most part, they are off-lease vehicles ready for a second lease on life, if you will.
If an initial inspection determines that the vehicle is worthy of passing the certification process, the dealer must provide the car's identifying information, its VIN, a multipoint inspection checklist, and if the automaker pays for the process to be completed, it must also send naming documents, such as the automobile' s VID, as well as stating he or she will need to obtain the manufacturer-certified vehicle. Once the dealer makes any necessary repairs and the mandatory vehicle history report is completed, the manufacturer gives its approval, at which point the dealership can list the car for sale on the dealers lot and website as a CPO vehicle.
Once you buy that CPO vehicle, you are then entitled to a manufacturer-backed warranty comparable to that of securing en route to your new car. For most automobile brands, that means zero-deductible repairs at any of the manufacturer's dealerships for a duration and mileage longer than the original warranty. CPO shoppers may choose to finance or lease a CPD vehicle, with payments that are less than for shopper financed versus leased.
Once the client signs their paperwork and drives off, they'll have access to 24-hour roadside assistance, as well as complimentary towing, trip-in-time coverage, and a loaner car to use while the CPO car is being serviced or repaired. Speaking of service, Lexus is a standout among other car manufacturers by offering free maintenance for the first 20,000 miles or two years you drive.
And there's another bonus: For every CPO vehicle with satellite radio from the factory, regardless of model, the new owner gets a free, three-month trial of SiriusXM.
How much more does CPO cost?
Although CPO programs are often best suited to luxury cars due to a greater chance of costly repairs than with 'normal' cars, they can be advantageous for volume brands as well. CPO luxury cars typically cost thousands more than their conventional counterparts, but if that saves you thousands on warrantable repairs, you may end up triumphing. Anyone looking for a brand-new car at fewer miles and more peace of mind should definitely consider any CPO program for their brand of choice in this area.
Why is a CPO car better than s/he compared to he normal used car?
Yes, you'll have to spend more money, but for those extra Benjamins, there's a lot of added peace of mind in knowing the car is in excellent condition and that it're covered under stipulations comparable in length and mileage to establishing if he or she bought.
How do you know if it's in good condition? The multi-point inspection. Porsche performs a 111-point inspection on the low end, while Audi's competitors are more thorough with their 300-plus-ppoint examination. Regardless of how many points are checked, these inspections ensure that a car's major mechanical, electronic, emissions, and safety components are up to specification. If any of them aren't, they're replaced, even if it's a cosmetic issue.
Aside from the inspection intensity differences, there are other factors that make certain CPO programs more effective than others. Expect to spend a ton of money on your next car? Numerous brands, such as Lexus and BMW, provide unlimited-mile warranties within the warranty coverage period. Several brands even give you a few days to return if you're not completely satisfied with he car.
Some CPO programs do not include a warranty deductible. Still, spending $100 on a repair that may cost tens of thousands is the better deal.
Whatever you're looking for in a CPO program -- and this applies to any time you are making hefty financial expenditure -- be sure to read the fine print and make sure the C PO deal you choose is appropriate for your requirements. If you're worried about having to shell out a few hundred to ten thousand dollars more for .PO car than if you were purchasing nifty new wheels, remember that you are still paying thousands less than the equivalent new set of wheels would cost.
Living with a CPO car is incredibly difficult when you are living in secluded areas.
CPO cars come with a manufacturer-backed warranty that extends the life of the original new-car warranty, in addition to the dealership's assurances that you're getting 'a like-new car for what is hoped to be viewed as attainable above merely swanky car prices.
Once upon a time, 'a Roadshow staffer' purchased nifty 2014 Audi TT. The car had 21,000 miles, leaving 29,000 miles and about a year on the original warranty. Once the original factory warranty expired, the CPO warranty took over. With it, they received another year of full warranty coverage with unlimited miles.
Pros and cons of the CPO program CPA program pros and con cons
If you choose to buy certified preowned, always keep these two principles in mind: First, you get what you pay for. Second, with used cars, you run the risk of buying someone else's problems.
While you'll most likely be behind the wheel of something that's downright reliable, a used car isn't always as reliable as. So you're saving money, but at the expense of a slightly shorter lifespan and fewer sensations like euphoric new-car smell.
CPO multipoint inspections and their associated extended warranties reduce your risk of hassling with a car in the event it turns out to be resale-eating nightmare. Furthermore, car dealers that work with dealerships will often finance CPO vehicles at a lower interest rate than they would have for repossessed vehicles, so some of the extra money you spend upfront may end up saving money with lower-cost financing.
But CPO isn't for everyone. It's certainly a good choice for people who want to save on luxury cars from brands that are famous for high repair costs and poor reliability. If the deal is for a mass-market brand such as Honda or Hyundai, it's worth looking into.
A CPO vehicle may offer all that a new car can, but for fewer money. In many cases, the numbers make sense given the inherent savings you'll enjoy compared to a brand-new car.
More automotive advice on topics related to cars
- How to check if your car has a recall?
- Is a car subscription the right fit for you?
- How to get your car fixed at home