Certified pre-owned status ensures a higher quality used vehicle

People who are in the market for a vehicle may worry that they will have to make a trade-off in either price or quality. Purchasing a new vehicle boosts the likelihood that it will be reliable for years to come, but you'll also have to be prepared for a higher price. Used vehicles are more affordable, but you may worry that their next breakdown is right around the corner.

Certified pre-owned vehicles offer something of a middle path. Vehicles with the CPO designation are likely to be at least a model year or two off, and they'll have some miles on the odometer. But these vehicles have also been subject to a rigorous inspection and are offered at a competitive price.

One of the biggest advantages of a CPO vehicle is that it avoids the worst period of depreciation. Bengt Halvorson, writing for the automotive site The Car Connection, says the biggest drop in value comes in the first two or three years of vehicle ownership.

By purchasing a CPO vehicle outside this timeframe, you'll be able to get a major discount and own the vehicle during a time when depreciation is less pronounced. Annie White, writing for Car and Driver, says CPO buyers typically get a discount of about 25 percent compared to a new vehicle.

Each automaker has its own qualifications for a CPO program. Philip Reed, senior consumer advice editor at the automotive site Edmunds.com, says the programs typically limit the acceptable number of miles on the odometer and only accept vehicles that are younger than a certain age.

For this reason, off-lease vehicles are particularly prevalent among CPO options. Leased vehicles are typically returned after three years, and their drivers can only drive a certain amount of miles each year without paying an extra cost.

To qualify for the CPO certification, a vehicle must also pass a checklist created by the automaker. The length of this checklist varies from manufacturer to manufacturer, but they generally cover the same issues. Alison Lakin, writing for the automotive site DriverSide, says a mechanic will go over both major automotive systems such as the condition of the brakes as well as minor areas such as paint blemishes and repair any defects. A dealership will also make sure the vehicle is not subject to any recalls and that it has a clean vehicle history report.

In addition to this check-up, a CPO vehicle usually comes with a warranty to ensure its reliability in the near future. White says this benefit usually extends the factory warranty with slightly less coverage, but still offers protection for a certain number of years or miles. Some warranties will cover the remainder of the term that started when the vehicle was new, while others will begin when the vehicle is sold with the CPO certification.

Even though you'll be saving money over a new vehicle purchase, a CPO vehicle will still cost more than a used vehicle without the certification. The auto value resource Kelley Blue Book says the difference may only be a few hundred dollars for some vehicles, but can be thousands of dollars higher for luxury models.

If you are considering a CPO vehicle, make sure you thoroughly review the documentation before finalizing the sale. White says some warranties have limited coverage, excluding work such as the replacement of worn brake pads. You should also find out when the warranty ends and whether there are any other included benefits, such as the use of a loaner vehicle while the CPO vehicle is in the shop.

You should also make sure that the CPO designation is from the manufacturer, not the dealership. Halvorson says some businesses muddy the waters by offering "certified" used vehicles. The business may have put these vehicles to their own inspection and repairs, but these are often not as rigorous as the manufacturer's program.

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