On average, people are about three times more likely to buy a used vehicle over something new, but how many consumers go for certified pre-owned vehicles over something truly used? There are a variety of reasons why someone might go for used vehicles over new. The main reason is that these options will be significantly cheaper and that you avoid hidden fees when you buy used.
However, there are others from avoiding dealing with the initial depreciation of the car or being able to tap into lower insurance prices. Regardless of the reason, a new car isn’t always the best option for most.
While new might not be the go-to choice for those that want a good deal on a vehicle, this doesn’t mean that car seekers are willing to sacrifice safety. Keep reading as we compare the two, talk about what they mean, and determine how they match up to something from the showroom floor.
Certified Pre-owned Vehicles: What Are They?
The term “certified pre-owned” (CPO) has become more prevalent in recent years as car dealerships look for new ways to market different model year options for used cars. A certified pre-owned (CPO) car is a late-model used car that’s inspected, refurbished, and certified by the manufacturer or dealer.
These cars come with a CPO warranty, extended protection plans, and other perks. They are only available for purchase at car dealerships so it’s important to know that your shopping options might be slightly limited depending on what you’re looking for.
Compared to a used car, a CPO car costs a bit more. The price tag difference will usually be around a few thousand dollars more. However, although there is a spike in price, CPO vehicles come with additional peace of mind.
If you’re considering buying a used car, you may be wondering if CPO cars are right for you. Certified pre-owned programs ensure a higher level of quality than traditional used vehicles. Here’s what you need to know about CPO vehicles, including the perks and drawbacks.
Certified Pre-owned vs Used: What is the Difference?
It’s no secret that the cost of a new car can be prohibitive for many shoppers. But the good news is that used cars are more affordable than ever and with the rise of certified pre-owned (CPO) vehicles, there are more options for used car shoppers than only working with private dealers.
But what’s the difference between a used car and a CPO car? And which is the better option for you?
These are questions that often confuse consumers because both options were “previously” owned at some point. With this, there are a few key differences between used cars and CPO cars aside from the lapse in factory warranty.
Price
One of the biggest differences between used cars and CPO cars is that one has a higher price. CPO cars are typically more expensive than used cars and there is no warranty coverage.
The price difference can vary depending on the make and model of the car. The reason why the price will be higher is that these vehicles are undergoing inspections by a mechanic that’s manufacturer-certified.
In only one year, after you drive a new car off of the lot, the vehicle depreciates by 20%. This is one of the main reasons for looking into CPO vehicles or a car from a previous owner versus new options from car dealerships. CPO vehicles, while only a bit more expensive, are still going to give you a better deal than going for something brand-new.
Another way to look at this is that you get the luxury of shopping for a vehicle with prices that represent certified pre-owned cars. You do, however, get the safety guarantee of a new car. Overall, you know what you’re getting with certified pre-owned cars.
It is entirely possible for private owners to have an inspection done and to provide a buyer with the documentation. The main difference is that between a used car and a CPO, the dealership’s documentation will often be more reputable in comparison.
Warranty
CPO cars come with a warranty, while used cars typically do not. The length of the manufacturer’s warranty varies, but it’ll be around 3 years or 36,000 miles. CPO models also come with other benefits, such as roadside assistance and an extended warranty.
There are two different warranty options. The first to be aware of is a powertrain warranty.
This type of warranty will apply to the engine and it means that the manufacturer commits to repairing any issues that might arise as associated with the powertrain. This consists of the engine, the drivetrain, and the transmission of a new vehicle.
Bumper-to-bumper warranties are the second type that you should be aware of. This form of coverage usually consists of all other issues associated with the car. it covers virtually everything between the front and rear bumpers, however, it does not include potential damage to the bumpers themselves.
This is because this type of warranty doesn’t include the body panels of the vehicle. Manufacturers will often use trim levels to determine a car’s special features and these features apply to this warranty within the bumper ranges of the vehicle.
Inspection
All CPO cars must go through a rigorous inspection process. The inspection process varies by manufacturer, but it typically includes a thorough inspection of the vehicle’s interior, exterior, and mechanical components. This is where drivers get a sense of security because you’re taking a lot of the guesswork with the stability and safety of the car out of the equation.
Inspections do cost money, to begin with. This is something that is already done before you shop and purchase certified pre-owned vehicles. During a vehicle inspection, a variety of things are being assessed such as the;
- Brake system
- Lighting system
- Electrical system
- Exhaust system
- Body and chassis of the vehicle
- Horn
While a CPO designation does full inspections, this doesn’t mean that you are getting a vehicle that’s guaranteed to have no damage. It’s more of a safety precaution and reduces your chances of experiencing avoidable issues with the vehicle.
With something used, there’s less standardization and in many cases no limited warranty. For example, CPO vehicles aren’t only used cars taken in by a dealership and inspected. There are actual eligibility requirements for a vehicle to become certified as a pre-owned vehicle.
What These Requirements Entail
These eligibility constraints mean that a vehicle has to be of a certain age and has a certain number of miles on it. This also means that the car must pass a mandatory multi-point inspection. The overall requirement list is quite strict.
CPO vehicles can only be 7 years old or they have to be newer than this cutoff. For mileage, there is a very strict threshold with this as well where CPO vehicles can only have 85,000 miles on them. This shows drivers that they aren’t getting a car that is “too” used.
The reconditioning process overall, though, gives car buyers more confidence in the health of their vehicle and its components. For example, the headings of a vehicle could present a problem.
This component’s made to carry engine exhaust gases to the exhaust system. Depending on the automaker, you might not experience as many issues from one model to model to another.
History Report
A CarFax vehicle history report is always included with CPO vehicles. This type of report will include everything from reported maintenance and service provided on the car. It will also include the title of the vehicle, all previous ownership documentation, and accident history.
If CarFax issues a clean report, this means that there were no significant forms of damage found. A CPO program ensures the success of receiving the most up-to-date and accurate reports.
This is another safeguard for those looking into purchasing a CPO vehicle. Along with a CarFax report, a 16-point inspection will need to get passed as well.
What Is a Used Car Considered As?
A used car is a vehicle that was at some point owned and driven by someone else. It may be a few years old or it may be a decade old.
The important distinction is that it is not a new car fresh off the assembly line. This means the odometer doesn’t have low mileage and this is actually something that makes car buying more doable.
It’s pre-owned and because of this, consumers have the option of getting a significant markdown from what the initial buyer paid due to general wear and depreciation over time. There are several reasons why someone might opt for a used car over a new one.
The cost is the most obvious. Used cars are typically much cheaper even after taking into account things like maintenance and previous or impending repairs.
When Considering Buying Used Keep a Few Things in Mind
If you’re thinking of buying a used car, be sure to take it for a test drive, have it inspected by a qualified mechanic, and consider your potential deductible. Keep in mind that they differ from CPO vehicles so it may fall on you to have the vehicle assessed before purchasing it. Private owners are not required to do this and can sell vehicles as-is.
You should also check the car’s vehicle history report to see if it has been in any accidents or has any outstanding recalls. This is due to there being no obligation for private sellers to provide this information either.
The difference that you might be noticing is that this information will be on the consumer to obtain. A CPO vehicle will always come with this information.
Additionally, even if you decide to use a loan to supplement finance rates, the pay-off amount will be much smaller than for something new. It will also be a much faster payoff process due to a lower price.
Everything You Need in a Car Whether Used or Certified Preowned Car
When looking for certified pre-owned vehicles, you don’t have to sacrifice quality, safety, or general assurance. One thing that car seekers enjoy about CPO options is that they are getting a good price. They are also getting a good grip on the reality of the vehicle’s past and present before they make a purchase.
Used cars, while less expensive, don’t come with the documentation or effort that CPO vehicles are always required to come with. To find your next car, visit SchumacherUsed and take a look at our physical or online showroom of CPO, used, and new options.