Certified Pre-Owned Vehicles: What You Need to Know Before You Buy

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If you’re in the market to buy a vehicle, as a savings-minded consumer you should be looking at used cars, aka, certifed pre-owned vehicles as an option.

One thing you’ll want to understand fully, though, as you go through the process is the truth about CPOs, or “certified pre-owned vehicles.”

Certified Pre-Owned Vehicles: Everything You Need to Know Before You Buy

Many car manufacturers have an agreement set up with dealers that when leased vehicles are returned, they “certify” that they’ve not been in an accident and their systems are working properly.

You’ll see or hear about a 115- or 144-point check, or something to that effect. The thinking goes that would-be buyers can have peace of mind knowing that their vehicles have been “certified.”

The thing is, what certification is this? Is there an automotive governing agency that is certifying these vehicles?

Sad to say, but the truth is “It’s just a marketing thing,” money expert Clark Howard says. “‘Certified pre-owned’ is a massive profit center. Do you know what certified pre-owned means? Nothing.”

Clark says CPOs can be pretty much anything depending on the dealer’s maintenance program.

“I could open up Clark’s Used Car Lot, go get my dealer license and I could slap on all the vehicles, ‘certified pre-owned’ and it means whatever I want it to mean.”

Certified Pre-Owned Vehicles: Do They Come With Warranties?

Some CPOs do indeed come with additional warranties from the manufacturer, but not all of them.

If you find a CPO with an extended warranty, Clark says that’s a good thing “but you’ve still got to have that vehicle inspected as a condition to purchase, just like any other vehicle.”


Certified Pre-Owned Vehicles: What the Label Really Means

Clark says the real game with CPO is that the label is used to boost the vehicle’s value.

The truth of the matter remains that “It is a meaningless term that’s just for marketing purposes that tends to boost the cost of the vehicle you’re buying. CPO vs. one next to it that’s not CPO, it can make a $2,000 difference right then and there. So be aware that this is a gimmick, a gimmick that may have some value, but there’s nothing that says that it does.”

3 Things You MUST Do Before You Buy a Used Car

  • See the vehicle title history: Know as much as you can about the vehicle before you buy. Here’s how to see a free VIN report.
  • Get the vehicle checked out: Make sure you enlist a mechanic for a thorough check before you hand over your hard-earned money.
  • Don’t blow your budget: Sellers will always tout  added amenities for why you should pay more for a car. Stick to your budget. If you negotiate, make sure you’re negotiating down and not up.

Listen to Clark discuss this topic on his podcast.

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