If you're wondering, are certified preowned cars worth it? The final answer depends on your own goals and the time you spent shopping for the used vehicle. For example, certified preowned cars guarantee a better vehicle, financing options, extended warranties, and extra bonuses. However, if you spend the time and effort, you can achieve the most benefits without buying a certified pre-owned car.
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Buying a used vehicle is a wise decision when you don't have enough budget to purchase a new one. However, although you'll have to worry about depreciation issues with newer vehicles, used cars come with their own drawbacks.
To avoid dealing with any surprises regarding major repairs in a vehicle that you just purchased, many dealerships and other agencies provide what's known as certified pre-owned cars.
This article provides you with all details and needs to know about certified pre-owned cars. It also helps you answer the question of are certified pre-owned cars worth it? We will highlight the mean pros and cons of lying a certified pre-owned car along with some additional details that help you make an informed decision.
What does certified mean when buying a used car?
The certified pre-owned cars program started back in the 1990s. The primary motivation behind these programs is that many customers return vehicles to the dealership in great conditions. Larger automakers thought that instead of selling these good vehicles in auctions or as used vehicles, why don't they spend time and effort reconditioning these cars and ensure they are in great condition to sell them?
That's why these larger automakers decided to perform thorough inspections and provide some additional features with these vehicles, including extended warranties and other bonuses to help customers have Peace of Mind about buying the used car.
The nice thing about certified pre-owned cars is that customers don't have to worry about major damages that can't occur immediately after buying any used vehicle from a private seller. It's not rare to deal with a situation where a private buyer sells you a car with significant damages that has to do with the engine or even the transmission. Thus, many customers find themselves uncomfortable shopping for used cars from random strangers.
However, buying a certified pre-owned car is not cheap, and it comes with its own expenses. Therefore, you need to evaluate your situation clearly before deciding whether certified pre-owned cars worth it or not. For example, you might find the same exact car in the CPO program for about $23,703 and the same vehicle for only $22,686 in non-certified inventories.
What are the advantages of buying a certified pre-owned vehicle?
According to experts, certified preowned vehicles come with four primary benefits, including:
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You get a better vehicle
The first and most important benefit you get when buying a certified pre-owned vehicle is getting a better car. In other words, all certified pre-owned vehicles follow certain criteria, and the pool of vehicles you select from guarantees that you won't buy a vehicle that experienced major damages.
For example, some automakers might not accept vehicles older than six years old. Other automakers require no more than 85,000 miles to accept your vehicle as a certified pre-owned. Even after qualifying for the mentioned criteria, vehicles go through a detailed, thorough inspection that focuses on more than 100 points to test.
One might wonder: what can I do to get a better vehicle without needing a certified pre-owned vehicle?
Well, if you were able to follow these steps, you can achieve the first benefit of certified pre-owned vehicles without buying 1:
- Put a certain boundary for both mileage and age
- Review the vehicles history reports and make sure that it wasn't abandoned or involved in major car accidents
- Perform thorough inspections with a professional mechanic and test drives
Once the vehicle passes the three mentioned bullet points, it's important to perform certain advanced checks, including the frame rail inspection and the engine compression test.
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You take advantage of extended warranties
The other benefit you'll get when buying a certified pre-owned car is extended warranty options. In general, many automakers provide both bumper-to-bumper and powertrain warranties. The automakers allow you to get an extended warranty up to 12,000 miles or one year for bumper to bumper, whichever comes first.
For powertrain train warranties, automakers provide you with 6 to 10 years of coverage for 100,000 miles depending on what comes first.
Keep in mind that certain automakers might only provide one type of warranty. For instance, Nissan does not provide a bumper-to-bumper option.
If you're wondering whether it's worth a certified pre-owned car, you can still get the benefits of extended warranties yourself by shopping for once. In other words, you can visit the dealership or the providers directly and shop for any available extended warranties. You need to read the contract carefully and the details to ensure that the extended warranty covers similar benefits to what comes with the certified pre-owned car.
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You might get financial options
When I used a private buyer's vehicle, you must pay the full price upfront. However, that's not the case when shopping for a certified pre-owned car. Most automakers and dealerships provide you with a long list of different financing options to choose from.
Although that's a benefit of a certified pre-owned car, you can still find your own financing options through external providers without needing the dealership. Thus, even this benefit can be achieved in many different ways as long as you put the right time and effort into working on it.
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You can take advantage of some extra perks
Finally, most certified preowned cars come with a list of perks and bonuses. Let's take a closer look below:
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Roadside assistance
Most automakers who provide certified preowned cars provide you with one year of roadside assistance if anything happens.
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Covered maintenance
Although most extended warranties in other types of coverage do not consider regular maintenance, certified preowned cars have some good bonuses. For example, Honda and Chevrolet will take care of any maintenance costs for the first two visits once you buy the vehicle. On the other hand, Acura will pay for the first visit, and Lexus can take care of the first four visits.
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Satellites radio
As an encouragement from many automakers, you might get the advantage of free satellite subscriptions for three months.
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Telematics
Additionally, certain automakers also provide bonuses for some telematics services. For instance, Chevrolet provides you with a one-month coverage for their OnStar safety and security program. On the other hand, Acura has a good three months coverage for their Acura link option.
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Good return policy
Many larger automakers have a reasonably good return policy. If you're not happy with the certified pre-owned car, you can simply return it. Keep in mind that the return policy is significantly different from an order maker to another. Therefore, you must review the details carefully to understand how long it takes before their term policy option expires.
For example, Mercedes-Benz provides it with up to seven days' how to return policy. However, GM vehicles limit the return option to three days.
Is it better to buy a new car or certified pre-owned?
Certified pre-owned cars and new cars are totally different stories. Each one has its own pros and cons, and depending on your own goals, deciding between the two can be a little different.
For instance, when you buy a new car, you will have peace in mind that there is no single mechanical problem unless there's an issue with the manufacturing process. Usually, most of these issues are covered by the manufacturer. Also, you'll have plenty of financing options, and more importantly, your vehicle will come with its original manufacturer warranty. Finally, when shopping for a new vehicle, you will most likely have a longer list of choices to select from than certified preowned cars.
However, purchasing a new car is not cheap, and it will definitely cause too much more than buying a certified pre-owned car. Also, most insurance companies will require higher premium rates for a newer vehicle versus a preowned one. Finally, the depreciation rate is a big deal for buying a new car. While the certified pre-owned vehicle will still experience some depreciation, it's not going to be as high as what you will experience when buying a new car.
How much value does certified pre-owned add?
Certified pre-owned cars are usually about 20% more expensive than non-certified cars. For example, if you look at the 2010 Audi A4 vehicle, you'll find it for only $19,000 in the non-certified inventory. However, when shopping for the same vehicle in a certified inventory, you will find it for about $22,000.
Similarly, if you shop for a 2010 Lexus RX, you will find it for only $26,500. However, when looking through the certified inventory, you will find the same vehicle for about $30,300.
Finally, if you are interested in the non-luxury vehicle, take the 2010 Ford Taurus example. This vehicle is available in the non-certified inventory for about $15,900 and in the certified inventory for about $18,100.
As you notice, most certified pre-owned cars are significantly more expensive than non-certified peers. It's important to do your due diligence before making a final decision and checking whether it's worth it or not.
When is the best time to buy a CPO car?
According to experts, the best time to buy a CPO car is towards the end of the year. And this time of the year finds to get rid of older cars to allow for more room for newer ones. With that, you will most likely find some clearance sales or end-of-the-year options to choose from.
Keep in mind that most employees also receive their end of year bonuses and other tax returns towards the end of the year. Thus, you need to balance the right time where there are some sales bonus options, but at the same time, the dealership does not ask for higher prices knowing that employees are ready to invest and buy a new car or a certified pre-owned car.
Can you negotiate a CPO car?
Yes, buying a CPO car is not different than buying any new or used car. You still have the option to negotiate the price if you're not happy with it. That's why we recommend that you do some homework and shop for multiple offers before coming through the dealership. When you have a number in the back of your head based on some research, you can determine when you're dealing with a good deal versus a bad deal. Thus, you can have a good reason to negotiate the price.
Conclusion
Buying a certified pre-owned car is a great option for those who can't afford to buy a new vehicle and don't want to deal with unexpected major damages in used cars.
If you're wondering are certified pre-owned cars worth it or not, answer this question depends heavily on your own circumstances. Although these vehicles provide you with good benefits, you can achieve these benefits without needing the program by spending some time and effort doing your own due diligence.
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