The new versus used car debate is as old as time. The price premium commanded by new cars includes warranties and benefits; buying a pre-owned car means spending less cash and avoiding the massive depreciation suffered by new cars, but there's a degree of uncertainty about its mechanical condition and ownership history.
What is a Certified Pre-Owned Vehicle?
A certified pre-owned (CPO) vehicle differs from other used cars in that it's been thoroughly inspected, and it holds all the qualifications required by the certifying party. The idea is, you'll spend less than you would on a new car and avoid some of the uncertainty of a used one. Best of both worlds, right? These programs are run by auto manufacturers or third-party groups including dealerships and outlets like MotorTrend.
Each program varies, but in addition to passing an inspection, they can include requirements for the age of the vehicle, the number of miles on the vehicle, accident history, and more. Most programs also offer some incentives to sweeten the deal and justify the extra price compared to a non-certified used car. Extended warranties, 24-hour roadside assistance, rental car allowances, and complimentary maintenance plans are all on the table.
Is Buying a Certified Pre-Owned Vehicle Worth It? Pros and Cons
A CPO vehicle definitely has its advantages. Especially for a model that hasn't changed much recently, a CPO example will offer significant savings compared to a new car while retaining a similar driving experience to the new model. It takes a lot of the guesswork out of picking a sorted, high-quality example of the car you're looking for and lowers the possibility of unexpected costly repairs.
That said, if you're coming from the used car world and enjoy the hunt, buying CPO might not seem worth it to you. Even if two used cars have the same mileage and were built in the same year, the CPO example will demand more cash to cover the costs of warranties, inspections, and the programs' associated benefits. If you are willing to pay for your own independent pre-purchase inspection, there's real money to be saved. Beyond budgetary concerns, CPO programs also eliminate the possibility of buying an older or modified vehicle.
Then again, depending on the car you're interested in and the local promotions being held, more attractive financing rates may be offered on new cars than used ones. Occasionally, choosing a used car means going without the latest technology only available on new cars. Also, some buyers may simply prefer the ultimate peace of mind knowing that they're the first driver to own and maintain their car.
Non-Luxury Certified Pre-Owned Programs
Because they compete at a lower price point, most non-luxury CPO programs include fewer benefits than an equivalent luxury program would. As an example of a non-luxury CPO program, let's consider Honda.
The automaker starts by whittling down the pool of potential cars by limiting eligibility to current model year vehicles and those up to five model years old, and they have to have under 80,000 miles. They are then subjected to a 182-point inspection, the report for which is available for download before your test drive.
Most benefits are the same for all Hondas, but the non-powertrain warranty (also called limited) changes based on whether the car in question is HondaTrue Certified (1-6 years old) or HondaTrue Certified+ (0-1 year old). The newer Certified+ vehicles add two years and 50,000 miles, beginning at the expiration of the existing three-year/36,000-mile limited warranty that comes with all new Hondas. In the case of older certified vehicles, the CPO program offers a 1-year/12,000-mile limited warranty that begins either at the end of the existing warranty (if the CPO car was purchased with the new vehicle warranty still active) or at the date of your CPO purchase.
All Honda CPO vehicles include a seven-year/100,000-mile powertrain (engine, transmission, and drive system) warranty that starts on a vehicle's original sale date when new. Other benefits include complimentary roadside assistance for the duration of the limited warranty, up to two complimentary oil changes within the first year of ownership, and a 90-day SiriusXM satellite radio trial.
Luxury Certified Pre-Owned Programs
To illustrate the difference between luxury and non-luxury CPO programs, let's examine the CPO program from Honda's luxury brand, Acura. Although there's a lot in common between this plan and Honda's, a few aspects make the Acura program stand out.
To be eligible, cars must be less than six model years old, have fewer than 80,000 miles, and pass the same 182-point inspection. Just like Honda, Acura makes the inspection reports for every vehicle available online. It also offers the same 90-day SiriusXM trial and the same seven-year/100,000-mile powertrain warranty, but that's where the similarities stop.
In place of Honda's one-year/12,000-mile Certified limited warranty or its two-year/50,000-mile limited warranty for effectively new Certified+ cars, Acura includes a two-year/100,000-mile limited warranty on every CPO vehicle sold. Acura also provides on-demand concierge service for the life of the limited warranty and one complimentary maintenance visit, which includes more than just the oil change offered by Honda.
What Is a MotorTrend Certified Vehicle?
Outside of manufacturer programs, third-party certifiers can add a level of confidence to your buying decision. Because a Nissan dealership can't certify a traded-in Toyota Camry, they look toward these third parties to minimize the buyer uncertainty that can accompany the purchase of a used car. The MotorTrend Certified (MTC) program is a great example.
The pool of eligible vehicles is wider with MTC, with vehicles up to 11 model years old with up to 120,000 miles. They are required to pass a 41-point inspection, and all parts needed to pass must be installed at the cost of the dealer.
As for a warranty, the dealer can offer two options, the first being a six-month/7,500-mile stated care warranty. It covers most mechanical systems—engine, transmission, fuel system, suspension, climate control, etc.—in the event of a mechanical failure. The deductible for repairs is only $100, and MTC cars can get warranty service at any location with an ASE certified mechanic.
The alternative is a Powerlife limited lifetime warranty. Under this coverage, as long as the vehicle returns for factory recommended maintenance within a 30-day/1,500-mile window, the buyer is entitled to powertrain repairs. Any repairs necessitated by mechanical failure of the engine, transmission, drive axles, or seals and gaskets are covered for as long as they own the vehicle. The program also includes complimentary powertrain inspections every 30,000 miles.
In addition to warranty coverage, MTC cars include two key benefits. First, there is a no-questions-asked 72-hour exchange policy, assuming fewer than 300 miles have been added to the odometer in that time. Second, all MTC vehicles include a best value guarantee that ensures that if you find a similar vehicle (same make, model, year, and trim within 10,000 miles) with the same benefits at a lower price, the dealer from which you purchased the car will cut you a check for the difference.
Dealers can also choose to add some or all of the following benefits as complimentary for six months after purchase: key replacement, paintless dent repair, road hazard tire and wheel coverage, windshield repair, cosmetic wheel repair, roadside assistance, paint repair, and fabric repair.
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October 20, 2020 at 03:10PM
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What Is a Certified Pre-Owned Used Car? And Are CPO Used Cars Worth It? - Motor Trend
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