Cars and Drivers

5 Benefits of Certified Pre-Owned Cars

Paul Ausick

Published: September 21, 2016 11:10 am

Last Updated: January 13, 2020 3:19 am

The average price of a new car in 2016 is very close to $34,000. The average loan to pay for that car was right around $30,000 and the average monthly payment for the average term of 68 months was $503.

According to a July report from Bankrate, in 50 of the largest U.S. cities, a median-income household cannot afford to buy a new car. In August we looked at the pluses and minuses of extending the loan period from five or six years to seven or eight years.

While that’s one solution to getting that new car you want, another is to set your sights a little lower. The average price of a used car in the second quarter of this year was $19,367, according to analysts at Edmunds.com. That’s up from $18,900 in the same period a year ago.

Used car sales in the second quarter totaled 9.8 million, including 3 million sold by franchise dealerships with about 678,000 of those (22.6%) certified pre-owned (CPO) sales.

Before talking about CPO vehicles in some detail, first we need to specify what the term means. Generally speaking, the car must be no more than five years old with less than 75,000 miles on the clock, and must have operated by the previous owner for at least 12 months. Edmunds notes that not all “certified” used cars are CPO vehicles, so be careful.

Buying a CPO vehicle comes with a number of benefits, and we’ve listed the top five here.

1. A CPO vehicle has been inspected by a carmaker’s factory-trained mechanic and any needed repairs have been completed. These mechanics typically work for a franchised dealer and not your local Friendly Bob’s Used Car Emporium. The dealers want to bring the car back to as close to as-new condition as possible in order to sell it for the highest possible price.
2. The manufacturer or the dealer offers a warranty on the CPO vehicle. Friendly Bob’s probably sells cars in “as-is” condition, meaning that as soon as you leave the lot, the car and all its problems — known and unknown — are now yours. Coverage from CPO warranties varies, but Edmunds notes that Honda offers a seven-year/100,000-mile powertrain warranty on a CPO vehicle in addition to any unused new-car warranty coverage plus a 12-month/12,000-mile warranty on non-powertrain components.
3. Perhaps the biggest benefit to a CPO vehicle is its price. For example a new 2016 Honda Accord EX costs about $27,200. A CPO 2013 version of the car sells for around $17,300, nearly $10,000 less than the new car and only about $1,100 more than the same car lacking the CPO designation. Honda’s CPO program includes a 182-point vehicle inspection and is available on cars no more than six years old and showing less than 80,000 miles on the clock.
4. Many manufacturers and dealers offer roadside assistance packages that may extend for up to two years at no extra charge.
5. Some automakers also offer a maintenance program that includes repairs on some required maintenance items for an extended period. This coverage may be free or available for an additional charge, and in some cases it is transferable if you sell the car before the maintenance warranty expires.