Is paying more for a Certified Pre-Owned (CPO) Vehicle really worth it?
In the recent years we have seen a shift in the used car market. It appears that consumers are showing more interest in certified pre-owned vehicles. Certified preowned vehicles may offer some additional assurance of quality through the use of extensive pre purchase inspections, maintenance and extended warranties. However, CPO vehicles will typically be sold at a higher price than its non-CPO alternate.
In this article we will explore all of the pros and cons of buying a “Certified Pre-Owned vehicle and assist you in determining if buying CPO is right for you?”
Pros of Certified Pre-Owned Cars:
1. Peace of Mind: The primary advantage of buying a CPO car tends to be the peace of mind they offer. Most CPO vehicle undergo an extensive inspection and refurbishment process by a manufacturer certified facility. During this service the vehicle undergoes regular service along with all necessary repairs to bring the car back to proper working order. Since most manufacturers put a great value in their CPO programs, they will usually exclude all vehicles that show signs of serious collision repair and damage. Trying to ensure that you buy a car in excellent condition with no stories or past issues that may affect the vehicles operation, safety and value.
2. Warranty: CPO cars typically come with an extended warranty. These warranties often cover the vehicle for an extended period beyond the original manufacturer's warranty, providing added protection against unexpected repair costs.
3. Transparency about the vehicle’s past: A CPO vehicle will usually come with a full vehicle history report. This report will reassure the buyer that the vehicle has not had any reported significant issues that may affect its value or reliability. Vehicle History reports may contain valuable details about the vehicle’s previous maintenance and service records, which may include everything from previous tow events to major recalls and service performed on the vehicle.
4. Quality Assurance: Since CPO vehicles are typically hand selected by a manufacturer certified dealer or service facility and undergo a more rigorous inspection process they tend to be in better overall condition and of higher quality. This process can save the consumer from the uncertainty that often accompanies buying a regular used vehicle.
5. Extra Benefits: Some CPO programs go a step further by offering additional perks such as: roadside assistance, loaner cars during service and trip interruption insurance. These extras can further enhance the preowned vehicle ownership experience.
Cons of Certified Pre-Owned Cars:
- Higher Cost: The most significant drawback of any CPO vehicle tends to be a higher price tag. The added cost of all the CPO related perks and services are being passed on to the consumer.
- Comparable cost of a new vehicle: In some cases, the price of a CPO model can creep very close to that of the same model brand-new, diminishing the cost-saving advantage.
- Vehicle Age and Mileage Restrictions: Many CPO programs have strict rules restricting the vehicle age and mileage. As cars manufactured within 3 years tend to have lower maintenance cost, they are prime candidates for CPO programs. Many manufacturer CPO programs restrict the vehicle age to no older then 6 years old. If you're looking for an older car or one with high mileage you might not find it in any CPO program.
- Varying Standards and Limited Selection: CPO programs differ between manufacturers and dealerships. Some may have more stringent inspection criteria or better warranty terms than others. Some areas and manufacturers may have exclusions on vehicle and coverage that may increase the difficulty of finding your desired CPO vehicle in your area.
Generally, the selection of CPO vehicles is more limited than that of regular used cars.
- Depreciation: While CPO vehicles may retain their value better than regular used cars in the short term, they will still depreciate at the same rate as their non-CPO counterparts over the long term.
Whether a CPO car is worth the extra cost depends on your priorities and budget. If you value peace of mind, warranty and a vehicle in top condition then a CPO car can be the choice for you. However, if you're on a tight budget and willing to assume some risk you might find better value in a regular used car.
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