Why CPO Cars Make Sense for Buyers and Dealers

TUESDAY, AUGUST 8, 2017

Certified Used Cars have become a win-win of sorts for both consumers and dealerships. Originating with Lexus and other luxury brands in the 1990s, certified pre-owned (CPO) programs provide car buyers with high-quality used cars backed by manufacturer warranties, while allowing dealers to sell off-lease cars with added benefits that make selling a used car easier.

Certified used cars sales at Lexus franchised dealerships now represent around one-quarter of sales volume. Since a fairly high percent of premium or luxury cars are leased, a significant number of late-model cars return to dealerships following a two-year lease, for instance. Certified used car warranties and support are just like those of new cars, which gives manufacturers and dealers incentive to only certify the very best used cars available.

Know Your CPO Program of Choice

Each auto manufacturer has its own certified pre-owned (CPO) program, so shopping for a CPO car from brand to brand requires some research, comparison and knowledge of what is included in the warranty. For most drivers, the warranty package is the main reason to purchase a certified used car over a used car. The rigorous inspection process is another highlight of CPO programs. More often than not, non-premium brands like Chevrolet, Honda, Ford and Toyota offer a one-year "bumper-to-bumper" warranty on certified used cars, plus added years of powertrain warranty to the package. Often, a certified used car is still covered by the original new car warranty, based on its low mileage and late-model status. Before deciding on a CPO car, buyers should determine how much added warranty coverage they will get in addition to the vehicle's original factory warranty.

Two of the main qualifiers for becoming a CPO car are mileage and age; most CPO programs require less than 80,000 miles on the odometer and a car that is at most six model years from new. Dealers market certified used cars as "premium used" or "gently used" vehicles by keeping the requirements for approval strict and accepting only pristine late-model vehicles into their CPO program. With an extended warranty including bumper-to-bumper coverage, certified used car buyers can take comfort knowing any future vehicle repairs will be handled at no additional cost to the driver.

This lower cost of ownership and peace of mind afforded by a certified used car is one of its strongest selling points. A buyer who opts for a certified car, SUV or truck can enjoy years of ownership with no repair costs, which is a similar experience to buying new -- but without the heftier price tag!