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What Are Certified Pre-Owned Vehicles?

8/8/2012
A certified pre-owned, or CPO, vehicle is a used car or truck deemed to be in good condition and protected by an extended factory-supported warranty. Typically, a CPO vehicle has a clean record free of previous accidents, has received a thorough inspection, and, because it is as good as a used vehicle can be, commands a premium over other non-CPO vehicles of the same year with the same mileage.

There are different kinds of pre-owned vehicle certification programs. For new car dealers with used-car sales departments, the vehicle manufacturer develops rigorous certification requirements that all vehicles must meet to qualify for the program. These certification programs are usually strict with regard to the age, mileage, and condition of the vehicle; require a detailed inspection and, if necessary, a reconditioning process; and typically include a factory-backed extended warranty designed to give buyers peace of mind. As a result, CPO vehicles sold at new car dealers typically command a premium over other used cars of similar age and mileage.

Nationally franchised used car superstores also perform vehicle inspections on the used vehicles they sell, and frequently offer short-term warranties and money-back guarantees. While these actions are taken to ensure that a used vehicle doesn't have frame or flood damage, is in good working order and free of mechanical defects at the time of sale, and won't cost extra in repairs during the first few weeks of ownership, they usually don't match the more detailed inspection and reconditioning process dictated by vehicle manufacturers to new car dealerships.

Sometimes, car dealers and independent used car operations will advertise vehicles as "certified," but unless the program is approved by the original vehicle manufacturer or is developed by a used car superstore company and applied to all vehicles sold by the chain's dealers, such certification programs may be designed to capitalize on the promise of CPO programs and premium pricing of CPO vehicles.

Sometimes, these non-factory supported programs are underwritten by third-party entities and may amount to nothing more than an extended warranty package that's been rolled into the vehicle's price. Vehicle inspection and reconditioning requirements, if they exist at all, are less rigorous than those required by auto manufacturers, and can be applied to vehicles with higher age and mileage limits. Furthermore, companies supplying independent third-party certification may lack solid financial footing, making it difficult to engage in legal recourse if necessary. Accordingly, these vehicles should be scrutinized a little more closely before being purchased.

Choosing a certified pre-owned vehicle often saves money compared to buying a new car, and provides the peace-of-mind that may be lacking when purchasing a used car from a private individual. However, not all certification programs are the same. Be sure that you understand the details of any certification claim made for a used vehicle before you buy it.