What Is a Certified Used Car and Why Do They Cost More Money?
Written by
Dawn Allcot
Edited by
Carly Brashears
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As of October 2023, new cars cost an average of $48,451, which is up slightly from last October. Although new car transaction prices have fallen 2.4% since the start of the year, according to Cox Automotive, they are still out of range for many Americans.
If you’re in the market for a vehicle, you might be considering a used car to save money. The average used car costs $19,694 in November 2023, according to Carfax data. This estimate includes just regular cars — not SUVs, trucks, vans, hybrids and electric vehicles, or luxury cars of any type.
Even so, with the average price for any used vehicle topping out at under $36,000 for pickup trucks and luxury SUVs, you can save a significant amount of money buying a used vehicle.
However, if you haven’t purchased a used vehicle in years, you may be concerned about the reliability of an older car or inheriting someone else’s car problems. Plus, most used cars don’t come with a warranty of any kind, which can be a major downfall if the vehicle has problems down the line.
A certified used car, often called a certified pre-owned vehicle or CPO, offers the best of both worlds: a promise of reliability and a warranty combined with a lower price than a new vehicle.
Bear in mind, you will pay more for a certified pre-owned vehicle than a regular used car of the same make and model, in similar condition and with comparable mileage.
What, exactly, is a certified used car and what benefits do you get by purchasing one instead of a regular used car?
Certified Used Car: A Definition
A certified pre-owned vehicle, or CPO, is one that meets certain standards set by the manufacturer. In addition, it may come with additional perks.
“CPO vehicles are often cherry-picked, have lower miles, and are cleaner vehicles with a clean history,” Alex Yurchenko — senior vice president for Black Book, an automotive data and analytics company — told Consumer Reports.
According to Kelley Blue Book, certified pre-owned vehicles meet standards for:
- Age.
- Mileage.
- Cleanliness.
- Condition (no major damage or major mechanical issues).
Once it passes the manufacturer’s rigorous assessment, it will go through a multi-point inspection and reconditioning of any parts. For instance, a pre-owned vehicle may receive new brakes and tires, paint touch-ups, interior detailing and repairs of mechanical components, if necessary, before it is certified.
Perks of CPO Vehicles
In addition to knowing you are receiving a clean, well-maintained, and thoroughly tested vehicle, you may receive additional benefits with a CPO vehicle.
Most certified pre-owned vehicles come with a warranty that extends the manufacturers’ original warranty. Warranty coverage may last for 12 months or 12,000 miles from the date you purchase the car, or may extend as long as 72 months and 100,000 miles from the date the car was first put on the road, Kelley Blue Book explained.
Other benefits may include a free vehicle history report, 24-hour roadside assistance, free satellite radio for a limited time, free service such as oil changes and loaner vehicles from the dealer if your car needs service.
A CPO car affords many of the same perks as purchasing or leasing a new vehicle, though with a substantially lower price tag.
Why Are Certified Used Cars So Much More Expensive?
In spite of the savings compared to buying a new car, a CPO vehicle typically costs more than a comparable car that has not gone through the rigorous certification process.
First, CPOs tend to be newer models, even if they aren’t brand new. That means a higher sticker price. Also, all the service and reconditioning a CPO vehicle undergoes costs the dealer money and the dealer needs to see a return on that investment.
Buyers benefit from CPO vehicles, too, though.
If you purchase a certified pre-owned vehicle from an authorized dealer, you’ll gain peace of mind in knowing your car has been inspected and validated by professionals. After all, the manufacturer is willing to put their seal of approval on the car, backed by an extended warranty.
If you purchase a CPO Honda, you’ll have three days to return the vehicle and exchange it for another CPO model if you are unhappy with your purchase. General Motors (Chevrolet, GMC, and Buick) offers the same promise to its pre-owned customers.
Plus, you may even be able to lease or finance a CPO vehicle from the dealer for cost savings and convenience.
Remember, as with a brand-new car, your purchase of a CPO car may be negotiable and the dealer may even be expecting you to haggle.
Beware of Who Is Certifying the Vehicle
Dealers can slap the name “certified” on any used vehicle and try to command a higher selling price, U.S. News & World Report warned in a recent article.
But only used vehicles certified by the original manufacturer are actually “certified pre-owned” and carry the benefits that make them worth the extra cost.
You can only find certified pre-owned vehicles at a dealer for the same brand. In other words, if a Nissan dealer is claiming to sell a CPO Honda, it’s not truly “certified pre-owned,” although it may have gone through some type of inspection.
Keep in mind that each manufacturer’s certification process, along with the perks offered, differs slightly. Toyota, for instance, is known for its 160-point minimum quality assurance inspection. GM has a 172-point vehicle inspection and reconditioning process.
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