Certified Pre-Owned: What It Is & Who It’s Best For

Article summary

• Certified pre-owned (CPO) cars are late-model used vehicles that pass rigorous multi-point inspections, meet strict mileage limits and feature clean titles.
• Automakers back these high-quality cars with extended warranties, complimentary maintenance and other helpful perks that give you extra reassurance.
• Standard used cars offer greater variety and lower upfront costs, but you can still negotiate the price of a CPO vehicle to potentially secure a fantastic deal.

The terms “certified pre-owned” (CPO) and “used car” may seem interchangeable, but rigorous inspection standards account for an important difference that’s worth knowing. While all certified pre-owned vehicles are used vehicles, not all used vehicles are certified pre-owned.

Here, we’ll go over some of the requirements that automakers hold for CPO programs and break down the pros and cons to help you decide which type of used vehicle is best for your budget and needs.

What is a certified pre-owned car?

Put simply, a certified pre-owned car is a late-model used car that’s been given a factory-backed limited warranty after undergoing a thorough inspection and reconditioning.

Authorized franchised dealerships and select independent dealers sell CPOs to help customers get a fully vetted used vehicle with warranty coverage for less than they’d pay for a new car.

Some of the certified pre-owned requirements by automakers include:

• Recent model year and low mileage – CPO vehicles must typically be less than 6 years old and have less than 80,000 miles. These requirements ensure the vehicle can maintain a manufacturer-backed warranty and pass a multi-point mechanical inspection.
• Clean title history – For a vehicle to qualify as certified pre-owned, it must never have been declared a total loss or salvage by an insurance company. This means no major accidents, frame damage or flooding can have occurred to the vehicle.
• Comprehensive inspection – Factory-trained technicians perform multi-point evaluations (typically covering 150 or more points) which check for and repair any problems with the engine, transmission, steering, braking, exhaust, suspension and electrical systems.

Advantages of certified pre-owned cars

We’ve covered the cost savings associated with the purchase of a certified pre-owned vehicle vs. buying new, and we’ve discussed the in-depth inspections that come standard with CPO cars. But what are some of the other pros to buying a certified pre-owned vehicle? Let’s take a look:

• Extended warranties – Almost all certified pre-owned cars come with limited powertrain warranties and limited bumper-to-bumper warranties. While CPO warranty benefits can vary by manufacturer, most offer an additional year or two of coverage beyond the expiration of the new-car warranty.
• Perks like complimentary maintenance and rental car reimbursements – While these perks and extras are not guaranteed with every certified pre-owned vehicle purchase, they’re often add-ons offered by manufacturers to help incentivize buyers and make ownership more convenient. 

Advantages of standard used cars

Despite the many advantages of buying a certified pre-owned car, there are some scenarios where a standard used car may be the better choice:

• Affordability – Certified pre-owned cars cost more than most used cars from private sellers or lots. According to Carfax, the difference in price between a CPO and a comparable uncertified car can be thousands of dollars.
• Choice – Due to strict eligibility requirements, there are a limited number of certified pre-owned vehicles available in certain makes and models. If you have a specific type of car, truck or SUV in mind, it may be much easier to find an uncertified version of that vehicle than a CPO. 

Pricing: Are certified pre-owned cars negotiable?

Like most used vehicles, pricing on certified pre-owned cars is negotiable. Additionally, some CPO vehicles come with a distinctive low interest rate for those who qualify. Watch for red flags around certification costs, however. If certification costs are listed as a separate fee instead of being factored into the price of the car, the vehicle may not be a real CPO car.

Some other red flags to look for in certified pre-owned cars include:

• Missing vehicle history reports
• Inconsistent maintenance records
• Mismatched tires
• Open recalls on that vehicle
• Refusal of a pre-purchase inspection by a professional mechanic, like those conducted at AAA-owned Car Care Centers and AAA Approved Auto Repair (AAR) facilities.

Nearly new, thoroughly checked: Closing notes on certified pre-owned

If you’ve been looking to buy a car and certified pre-owned is on your mind, you’ll find many reasons this subcategory of cars ranks high within the broader used car market.

While CPO vehicles generally cost more than equivalent used models, they come with extensive inspections, extended warranty coverage and refurbishment that can give you greater confidence in your purchase.

Often, this is the easiest way to buy a like-new vehicle without incurring new car costs. Just remember to check the fair purchase price of the specific make and model you’re looking at before driving off in your certified pre-owned vehicle.