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Certified Pre-Owned Cars May Cost Less Than You Think

by Jerry Edgerton / November 4th, 2021


With the shortage of semiconductors today, new cars are harder to find, forcing buyers to look for used alternatives. Certified pre-owned cars (CPO) can be a good, less expensive alternative to buying a new car.

They differ from regular used cars because they have been through a multi-point inspection by the manufacturer and include an extended warranty. To qualify as a CPO, the car must be less than seven years old, with no history of accidents, and have less than 80,000 miles on them. Some CPO cars may even include roadside assistance, loaner car access, as well as other perks. That assurance and extra protection can make them a bargain versus a new alternative of the same model.

A popular notion is that certified cars may cost thousands of dollars more than regular used cars, but certified cars may cost less than you think.  A study by the research website iSeeCars.com looked at over 1 million used cars to see how much the cost of CPOs differed from non-CPOs. They found that a CPO cost on average about 3.6 percent more than a non-CPO equivalent. It varies depending on the make and model, going from 1.6 percent for a Jeep Wrangler to 7.9 percent for a Lexus.

But certified cars are still used cars, and you need to shop carefully and pay attention to all details of the transaction.

Not all certified programs are equal. Dealers may clean up a used car and call it certified—based only on the dealership assurance. But with that situation “Nobody is holding them to standards in order to be in the certification program,” says Phong Ly, CEO of iSeeCars.com. Check to be sure that a certified program is backed by the manufacturer, he advises. In that case, Lexus or Ford or other manufacturer will require an inspection of 150 or more features of the car. And the parent company will stand behind the warranty.

Details can vary greatly even among manufacturer certified programs. For instance, Fiat Chrysler models—including Jeep, Dodge, and Chrysler—come with a six-year/80,000-mile (whichever comes first) comprehensive limited warranty.  However, there is a $150 deductible if you bring the car in for repair. Chevrolet and other General Motors brands add a 12-month, 12,000 miles new certified warranty and a six-year, 100,000-mile powertrain warranty from the date the car was first sold as new. It also doesn’t charge a deductible for warranty claims on its CPO models.

Are certified used cars worth considering? If you do your homework carefully, the risk of problems is less than with regular used cars.

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