By Gayle SatoWhat Does Certified Pre-Owned (CPO) Mean?
Quick Answer
A certified pre-owned (CPO) vehicle is a used car that’s been inspected and refurbished to manufacturer or dealer standards. CPO cars are typically newer, have low mileage and may be eligible for extended warranties.
A certified pre-owned (CPO) vehicle is a used car that's been inspected and refurbished to manufacturer or dealer standards. CPO cars are generally newer and have lower mileage than typical used cars. They may be eligible for extended warranties, special financing deals and added benefits like roadside assistance.
If you're in the market for a used car that's nearly as good as new, you might want to consider a CPO vehicle. Here's a quick overview of CPO cars: what they are, what to look for and how to get one.
What Is a Certified Pre-Owned Car?
A certified pre-owned car is a used car that qualifies for a special manufacturer (or dealer) designation. CPO vehicles may be newer and have lower mileage than the average used car on the lot. Although CPO rules vary, vehicles typically undergo an expert multipoint inspection. Any needed repairs or restorations may be completed pre-sale, and CPO cars are usually eligible for additional warranty protection, dealer financing and more.
Every CPO program is different. If you're interested in a CPO vehicle, ask the dealer about their certification program and how it might apply to your car. A few points to ask about:
- Maximum age and mileage allowed
- Vehicle accident and service history
- Multipoint inspection process and results
- Repairs or refurbishments made
- Warranties that come with the car
- Additional benefits, such as free maintenance
- Special financing options because the car is CPO
What Is the Difference Between a Certified Pre-Owned and Used Car?
A CPO car is a used car, but it comes with a variety of extras. Specifics vary from one CPO program to another, but here are some basic distinctions between CPO vehicles and regular used cars.
| Certified Pre-Owned Car | Used Car | |
|---|---|---|
| Age and mileage | Meets CPO requirements for maximum age and mileage, which vary by manufacturer and program | No restriction |
| Condition | Has undergone a multipoint inspection. Critical repairs or restorations have been made to meet CPO standards. | Unknown. You can ask the seller to review the repair record and vehicle history report (such as AutoCheck). Consider having a third-party mechanic inspect the vehicle and recommend repairs. |
| Warranty |
May come with warranties, including:
| Typically includes remaining manufacturer's warranty only. Extended warranties (if available) are often purchased separately. |
| Financing | Manufacturer or dealer financing, including used car leasing, may be available. | Dealer financing varies and is not available from private sellers. Bring your own financing or pay cash. |
| Extras | May include extra benefits such as free maintenance, roadside assistance or a satellite radio trial | Vary by seller |
| Price | Typically priced higher than non-CPO vehicles | Varies but is often lower than the price of a CPO vehicle |
| Availability | Primarily available from franchised dealers, though independent used car dealers may offer a version of certification as well | Available anywhere, including independent used car dealerships and private sellers |
Pros and Cons of Buying a Certified Pre-Owned Car
Other than cost and availability, there aren't many downsides to buying a CPO car. These cars are generally well-maintained and in good condition, and they have the backing of their manufacturer or dealer. Here's a quick list of pros and cons if you're considering a CPO.
Pros
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Premium selection: Dealers choose newer cars in good condition to become CPO vehicles. They're typically free of major issues and defects, such as mechanical problems or frame damage from major accidents.
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Inspection and reports: CPOs go through a multipoint inspection and repair process, the results of which may be available for your review. You may also get a free vehicle history report that shows the car's record of accidents and service.
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Warranties and support: CPOs have been inspected and repaired or refurbished, and may have special warranty coverage beyond the original manufacturer's warranty.
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Perks: CPOs may have additional benefits, such as free roadside assistance.
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Special financing: A CPO may be eligible for dealer financing with special incentives or lower interest rates.
Cons
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Cost: CPOs often cost more than regular used cars.
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Availability: CPOs are typically available only from franchised dealers—that is, Toyotas are available from Toyota dealers, BMWs are available from BMW dealers and so on.
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Risk: A CPO vehicle isn't guaranteed to be trouble-free and isn't necessarily a better deal than a comparable non-certified used car. You may pay more and still not eliminate all risk.
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Reduced selection: Your choice of cars is controlled by whatever CPO cars are available at the dealerships you visit. This may mean you won't be able to find a particular model, for example, if the dealer doesn't have any.
Should You Buy a Certified Pre-Owned Car?
Buying a CPO car is a great option if you find a vehicle that fits your needs and budget. However, since used cars represent so many variables—age, mileage, condition, accident history, cosmetic damage, seller (dealer versus private party) and so on—each car (and deal) must be evaluated individually. Here are a few reasons to choose a CPO vehicle, or look elsewhere in some cases.
Reasons to Choose a Certified Pre-Owned Car
- You're searching for a used car in top condition. A CPO designation doesn't guarantee you're getting the newest and most pristine used car, but it can help you quickly identify a pool of newer model, low-mileage cars that are backed by the manufacturer or dealer.
- You want dealer financing or a used car lease. Access to special incentives and low-interest financing can help make choosing a CPO more affordable. Dealers are also more likely to offer a used car leasing option on a CPO vehicle, if you're interested in a lease.
- You'll sleep better knowing your car has warranty protection. Buying a used car can feel risky. Buying a CPO car with a dedicated warranty may alleviate some of the anxiety.
- You found a CPO you love at an affordable price. Availability and pricing are the main challenges here; finding the CPO car you want at the right price can be difficult. If you've found a CPO that checks all the boxes, game on.
Reasons to Consider an Alternative
- You found a great deal on a non-certified vehicle. Used vehicles being sold by private parties, independent dealerships or off-brand dealers (for instance, an Audi dealer selling a used Lexus) generally aren't eligible for a CPO program. That doesn't mean you can't find a low-mileage used car in great condition from one of these sources—or from a franchised dealer that simply elected not to designate the car a CPO.
- You need the lowest possible price. When you absolutely, positively need the lowest price you can get, try searching for vehicles by price first and only consider CPO vehicles that fit your budget.
- The car you want is already covered by a manufacturer's warranty. If the car you're considering is well within its original warranty, you may not need additional CPO coverage.
- You don't need dealer financing. Dealer incentives, low-interest financing or used car leasing are all good reasons to consider a CPO car. But if you plan to pay cash or you have your own financing, this isn't a benefit you need.
How to Buy a Certified Pre-Owned Car
Follow these steps to find a CPO vehicle and negotiate your best deal.
1. Research Your Options
Once you've settled on a make and model (or two), try searching online for the vehicle you want. Car buying sites may allow you to select CPO cars specifically, or you can search by make, model, year and mileage and look for cars that are designated CPO. Alternatively, many manufacturers have searchable listings of CPO vehicles that may help you locate cars that fit your needs.
2. Check Out the Car
Review inspection and repair reports; check out the vehicle's history. Do a test drive. Sit in every seat. Compare pricing with results from car valuation sites like Edmunds or Kelley Blue Book, so you can evaluate whether or not the CPO price is fair.
While you're considering costs, don't forget to factor in insurance. Get a few insurance quotes and consider lining up your policy in advance. In most cases, you'll need to have insurance in place in order to drive your car off the lot.
Learn more: Why You Need Car Insurance Before Buying a Car
3. Ask About Warranties, Refunds and Other Benefits
Because every CPO program is different, request a complete rundown of the car's warranties and included benefits. Ask about the dealer's return or refund policy: Some may allow you to return the car within a few days or weeks to exchange it for a different vehicle.
4. Negotiate and Sign
You can negotiate the price of a CPO vehicle, though some dealers may not have a ton of flexibility because they've already invested in an inspection, repairs and warranties for the car. It never hurts to ask for a fair price. Also, try asking for a deal on financing or extras once you've negotiated your best price.
The Bottom Line
If you want a used car buying experience that's more like buying a new car, a CPO vehicle may be the right blend for you. A CPO car will save you money versus a brand new vehicle, but with a bit of extra assurance that you're getting a newer vehicle in good condition—and a warranty to back it up.
You may decide to shop exclusively for CPO cars, or you might try comparing CPO and non-CPO vehicles side by side and weighing the value of each. Either way, if you're planning to finance your new used car, you may want to check your FICO® Score☉ and credit report online with Experian first. Good credit can help you secure the financing you need. Checking your credit in advance takes some of the guesswork out of getting a loan or lease with favorable terms.
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About the author
Gayle Sato
Gayle Sato writes about financial services and personal financial wellness, with a special focus on how digital transformation is changing our relationship with money. As a business and health writer for more than two decades, she has covered the shift from traditional money management to a world of instant, invisible payments and on-the-fly mobile security apps.
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