There’s a marked difference in what a certified pre-owned car represents vs. a regular used car. They might both be in excellent condition, but the CPO car is backed by the manufacturer. When you buy a CPO vehicle, you’ll generally pay more than if you were to buy a regular used car, but you’ll enjoy the additional peace of mind that comes with factory-backing.
Why Buy Used?
Buying a used car makes sense in many ways. A new car loses a big chunk of value in the first few years after it’s driven off the lot. Used cars have already taken that hit, so you’ll typically be paying a lot less to get a car that’s three or more years old. However, the biggest drawback to used cars is reliability. Even a car that’s only three years old might have a lot of miles on it.
This is probably the main reason that some car shoppers stick to buying new cars. For those shoppers, that’s where CPO cars come in. These cars include warranty coverage from the automaker and must pass rigorous inspections before being certified. They may cost more than the average used car, but they’re still more affordable than a new car.
Similarities Between Regular Used Cars and CPO Cars
All CPO vehicles are used cars, but not all used cars are CPO. Many regular used cars are in great condition, just like a CPO. They may have low miles and meticulous records from their previous owners as well. Both CPO and regular used cars might have accidents or major repairs in their history. Both types have also absorbed the initial depreciation amount, which makes them cheaper than new cars.
Why Does Depreciation Matter?
Depreciation is a loss in value. When you buy a new car, you essentially pay a large penalty when you drive the car off the dealer’s lot. Why? Because the vehicle is now no longer new. Depending on the brand and model, a new vehicle’s value can go down by as much as 25% in the first year of ownership. It goes down more in the second year. Used car buyers are taking advantage of the fact that the first buyer paid the significant depreciation cost.
What Does Certified Pre-Owned Mean?
A CPO car is a used car that has passed a stringent inspection backed by the manufacturer. If any repairs are needed after the inspection, the automaker completes them before adding the car to its CPO fleet. A CPO car also comes with a manufacturer-backed warranty. The requirements for CPO vehicles vary by automaker. Off-lease vehicles are a common source of CPO vehicles.
Most vehicles are fairly recent model years with low mileage. They usually also have records from the previous owner showing that they’ve been properly maintained. True CPO vehicles are only available from dealerships of the same automaker. For example, if you wanted to buy a factory CPO Mazda CX-5, you would need to go to a Mazda dealership.
Advantages of Buying One Type of Used Car Over Another
The only real disadvantage that a CPO car has compared to a regular used car is cost. Most CPO cars will cost a bit more and sometimes a lot more than a regular used car. However, the trade-off is that you get a warranty backed by the automaker and the knowledge that the car has met several important reliability metrics before being offered for sale. It’s definitely possible to find a regular used car that’s also in excellent condition, but it’s likely to take a lot more work and knowledge from the buyer.
