Should you consider CPO? These tips can help you decide

by Leftlane Staff
Should you consider CPO? These tips can help you decide

To CPO or no?

When is a used car not merely a used car? When it's CPO—a Certified Pre-Owned vehicle. Are you in the market for a new (to you) car but not sure whether CPO makes sense for your lifestyle? Maybe we can help you decide.

What is CPO?

We've covered this in depth before, but to summarize, a CPO vehicle is a low-mileage used vehicle in better than average condition that is being sold with an extended warranty. CPO vehicles are more expensive than the equivalent non-CPO vehicle because the manufacturer (usually; more on that later) is baking the value of the warranty into the sticker price of the car, truck or SUV in question.

What does that mean to me as a customer?

The Certified Pre-Owned purchase process sounds like something that could be complicated, but it's really not. CPO vehicles might get their own category when you're looking through online dealer inventories, so that may add an extra step to your search. More often, though, they're simply lumped in with the rest of the used-car listings. They'll usually be prominently labeled if you examine their individual listings, but you can usually spot them by their higher list prices before you even get that far.

Once you're at the dealer, there's essentially nothing different about the buying experience. The certification process is performed before the car is listed for sale, and the dealership will often provide a checklist showing all of the items that were inspected, along with the mileage of the vehicle when the inspection was performed.

It's a good idea to make sure the mileage on the inspection is the same as the mileage on the vehicle, or at least close enough that any discrepancy can be explained by other customers taking test drives. If there's a large difference, it's worth asking your sales rep why that is so. If he or she cannot offer a reasonable explanation, you may want to shop elsewhere.

How do I know that a CPO car is a good deal?

This is a difficult question to answer, as a "good deal" in this case is different for every buyer. You should research the CPO program for the car (or cars) you're interested in and see what they offer. Just like new-car warranties, CPO programs differ from manufacturer to manufacturer.

If there's any hard, universal rule to follow, it's this: Make sure the car has the options you want, test drives well, and is cheaper than a new equivalent. CPO vehicles are often lease returns (vehicles turned in at the end of a lease term--generally between one and three years), and the best deals are probably going to be on older models. Consider, however, that older cars may lack the features found in their brand-new equivalents, especially if the car has undergone a significant redesign since the CPO vehicle was leased. Don't assume a CPO car will offer the same options. Again, research is important.

I found a "Certified" vehicle at a small used-car lot. Is this a good deal?

Approach this scenario with extreme caution. While CPO programs are essentially factory-backed extended warranties, the key there is that they are factory-backed. Mercedes-Benz, for example, stands behind its CPO warranties, and you can comfortably assume that Daimler's luxury marque isn't going to fall off the face of the earth any time soon.

A "Certified" car on a general used-car lot is not the same as an actual CPO vehicle. There's no factory extended warranty here. In fact, this car is most likely backed by a general aftermarket warranty extension program similar to those you see advertised at all hours on television or spamming your mailbox with official-looking "final notices" which curiously lack any mention of your car's manufacturer.

Like the used-car dealers who sell them, these are often fly-by-night affairs whose products are more like insurance policies than actual warranties. You're often required to pay up front for repairs and apply for reimbursement, and you may even be saddled with deductibles and other irrecoverable costs. These are the mail-in rebates of the warranty world. When they work, they're fine. They often don't.

Leftlane's bottom line

Don't let examples of shady business practices deter you in your search. Use caution, do your research, and when in doubt, just back out. The car you want is out there; just be patient.