Home / Auto News / News article: What is a Certified Pre-Owned Car and What Types of CPO Cars are there? - AutoGuide.com News
 |  May 24 2013, 9:31 AM

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A Certified Pre Owned car might sound like the smart buy for you, but be careful, that term has several meanings. Some cars are only dealer certified, while others are covered by the manufacturer. There are advantages and disadvantages to each kind of CPO offer, so let’s break it down to help you buy your new used car.

What is CPO?

Generally, a certified pre-owned (CPO) car is a used car that has either been traded in, or bought for resale. These cars usually have already had a pre-purchase inspection performed on them, as well as a safety test, and commonly come with a warranty. For many, CPO means peace of mind when it comes to buying a used car, but they do come at a price premium.

DEALER CPO:

used-car-salesSome car dealerships will offer their own kind of certification process. They’ll point to an extensive check-list that a car must meet before becoming a certified pre-owned car. This can include things like mileage as well as wear and tear on the brakes, clutch and tires. These cars typically don’t have any history of accidents. From there, the car is usually fixed up to meet the qualifications and sold as a Certified Pre Owned vehicle on the lot.

THE FINE PRINT:

Often the dealer will promise a warranty, but that will usually be limited to that particular dealership. Dealer CPO offers are less trust worthy. While they have the promises of most other CPO cars, the vehicle for sale is usually never seen by anyone outside the dealer. That means you have to trust the dealership’s word about how a car passed certification. In any case, they are still sold with a price premium like they are a manufacturer CPO car, despite the lower quality inspection and more restrictive warranty. In comparison, you can get any used car independently checked out by a mechanic in addition to a third party warranty to cover the vehicle, at a lower price than the extra cost of a certified pre-owned car. Be wary, however, of third party warranties, there’s very few third-party warranty or service contracts which actually pay up when you need them to.

FRANCHISE CPO:

Used-Car-LotFranchised used car stores also have a certified pre-owned program. Similar to others, they ensure that there’s no frame damage and that the car is in good mechanical condition. Additionally, the car will likely have a warranty that is good at any one of the franchise’s locations, giving you extra flexibility when it comes to getting repairs on your vehicle.

There are even some more comprehensive short-term warranties and money-back guarantees with dealer franchised CPO offers, which allow for even more peace-of-mind when it comes to buying a used car.

DO YOU TRUST THE FRANCHISE?

Despite all the offers, these kinds of CPO offers still pale in comparison to factory/manufacturer CPO offers. With a more detailed inspection and regimented reconditioning process, franchise CPOs are still pricey for service and information you can get with a mechanic and car-fax. Just like a dealer CPO, a franchise CPO can just be a method to get buyers more comfortable with buying a more expensive used car, with a little bit of extra coverage. While the extras like a money-back guarantee help, they’re often time limited, meaning you’re on your own a few months after purchasing the car.

FACTORY CPO

MBCPOOften a new car dealership will have a used car department, which specializes in selling certified vehicles. Unlike dealer and franchise CPOs, these used cars have to follow the manufacturer’s strict conditions in order for them to be certified. This means that a car again has to have an accident-free past, be below a certain mileage, and be repaired or reconditioned up to a certain standard. Additionally, they carry an extensive factory owned warranty, which is backed not by just the dealer, but any location where the vehicle brand is sold.

THE BEST OF THE BEST

The advantages here are profound, as it’s the brand’s entire reputation at stake here, not just the dealership or a franchise. These cars have to be the perfect example of a used car from this automaker, and face a rigorous inspection that must be signed off by both the seller and the manufacturer. Like other CPO cars, these still carry a higher price than other used cars, but at least the certification process is fleshed out, and the car gets seen by more than one individual at a dealership.

SEE ALSO: Should You Buy a Certified Pre-Owned Car?

IS CPO FOR YOU?

At the end of the day, every CPO vehicle will be more expensive than other used cars. If you are comfortable talking to third-party sellers, searching through classifieds, and dealing with independent pre-purchase inspections, then you can likely save money over a CPO and still have some peace of mind. If you’re new to used car buying, or don’t mind spending a bit more in order to not go through the rigors of used car sales, then CPO will be a good choice for you. CPO cars also usually get the benefit of a warranty, or post-purchase coverage, meaning you can breathe easier once pulling the trigger on a used car.