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What Does Certified Pre-Owned Mean?

Finance | 05/22/2023 20:53

We typically think we have two options when buying a car: buying new or buying used. But there is actually a third option that is somewhere in the middle. Buying a certified pre-owned car is a great way to get a car that is reliable and affordable. So what exactly does certified pre-owned mean, and what are the advantages?

Here’s everything you need to know about buying a certified pre-owned car.

What does certified pre-owned mean?

A certified pre-owned car is a used car that has been thoroughly vetted and repaired by a car dealership. Every manufacturer has different requirements for the cars that they buy back through their CPO program. In general they will have requirements for the following:

  • Mileage

  • Age

  • Condition


Dealerships have these types of requirements to ensure that their CPO cars are dependable. They will recondition the cars and make any repairs so that the cars are at a new car level in both appearance and performance. Here are some CPO program requirements from major brands:

  • Hyundai: Less than 5 years old, less than 60,000 miles, 150-point quality assurance inspection, and a clean CarFax History Report

  • Dodge/ Chrysler /Jeep/ RAM: Less than 5 years old, less than 60,000 miles, 125-point quality assurance inspection, and a clean CarFax History Report

  • Ford: Less than 6 years old, less than 80,000 miles, 172-point quality assurance inspection, and a clean CarFax History Report

  • Toyota: Less than 6 years old, less than 85,000 miles, 160-point quality assurance inspection, and a clean CarFax History Report

  • Subaru: Less than 5 years old, less than 80,000 miles, 152-point quality assurance inspection, and a clean CarFax History Report

What are the advantages of buying a certified pre owned car?

You can get a newer vehicle.

CPO programs always have age and condition restrictions on their cars. Because of this, you can be assured that a CPO car will be newer than most used cars (usually less than 6 years old).

They usually come with a warranty.

Since CPO cars are newer they will often still be under their original warranty. Additionally, CPO programs will often include another warranty, such as limited bumper to bumper warranties for the first 12 months or 12,000 miles. These warranties do vary greatly from dealer to dealer and manufacturer to manufacturer so you need to read the fine print to be sure of what is covered. While some CPO warranties extend factory coverage, others will cover different things and kick in only when the factory warranty ends. Some programs will require a deductible for repairs, while others may cover repairs entirely.

There are often added benefits. 

There are often added benefits when you purchase a CPO car, such as roadside assistance, free XM radio trial, and free oil changes for a set period of time. Many also include rental coverage should your car need servicing. Here are some benefits that specific manufacturers offer:

  • Hyundai: Special financing rates, 10 year/ unlimited mile roadside assistance, no out of pocket cost for covered repairs, 90 day trial of SIRIUSXM Radio, Hyundai Protection Plan Wrap Service Contracts, no cost cap for towing under roadside assistance.

  • Subaru: Special financing rates, 7 year/ 100,000 mile powertrain coverage, 24/7 roadside assistance, $500 owner loyalty coupon, 3 month trial of SIRIUSXM Radio, one year trial subscription to STARLINK.

  • Ford: Special financing rates, 14 Day/1,000-Mile Money Back Guarantee, 12 Month/ 12,000 Mile Comprehensive Limited Warranty, 7 Year/ 100,000-Mile Powertrain Limited Warranty, roadside assistance.

You can finance if you have the need.

When you buy a used car from a private party, you will need to have cash in hand. You may be able to secure a personal loan, but they typically will have higher rates than an auto loan and have different requirements. But when you buy a certified pre-owned car you can secure financing. CPOs typically have lower APRs than merely buying a used car from a dealer that is not in the CPO program. 

Are certified pre-owned car prices negotiable?


Just like when you buy a new car, you should definitely try to negotiate the price of your CPO. Some dealers have instituted “no haggle” policies, but there is usually wiggle room.

You should always focus on the out the door price when you are negotiating to buy a car. Dealers will try to get you to focus on your monthly payment or the financing terms instead of looking at the price tag, but this is meant to distract you from the total amount that you are spending.

Is a certified pre-owned car worth it?

You will need to weigh the advantages and disadvantages when looking to buy a CPO car. There are a lot of benefits to CPO cars, such as a warranty, added benefits, and financing opportunities. Perhaps the biggest advantage is that you can get a really great car that is vetted and repaired and it will be much more affordable than buying a brand new car. For example, a two year old CPO car tends to cost about 25% less than a new car of a similar model. That’s a huge savings that will allow you to get a great car without breaking the bank.


But, there are some disadvantages that you have to consider. CPO cars are more expensive than if you choose to simply buy a used car. This is because a CPO program will cover a total reconditioning and certification, which will run several thousand dollars more than a similar car that is not certified.


Additionally you will have less options overall when selecting a car that is right for you. Because of the requirements that the CPO cars must meet, it’s likely that the exact car–make, model, color, trim level, etc–will be available. This might be a dealbreaker for you or it might not, but it is a disadvantage to consider.

How can I prepare to buy a certified pre-owned car?

Buying a CPO car is similar to buying a new car. Here are the steps you should take when looking to buy a CPO car. 

Do your research.

If you have your heart set on a brand, do some research to find out about their CPO program. What are the requirements? What cars are available? You should have a good idea of what you are looking for in your future car, but having some flexibility will give you a great chance for success. You should also look into the financing options of different CPO programs. Many programs offer great rates on their CPO cars, which is another great benefit. Hyundai offers 0.9% APRs for 36 months on select cars, while Ford offers 0.99% APR financing for their “Gold Certified Vehicles.” Stopping in at a dealership and asking for more information may help you get an idea of what you want and what you can afford. You should also make a note of which benefits are offered. Some will offer free trials, some will not charge for certain maintenance services, and all of these things can help tip the scale towards one brand or another.


Get pre-approved.

Getting pre-approved for financing will not only give you a good idea of what type of car you can afford, but it will give you more leverage when negotiating. Many CPO programs may be able to beat your pre-approved APR, but it’s still good to have. 


Find the car you want.

Being flexible will help you to secure a certified pre-owned car. Finding the general car you want and being less picky about small details will benefit you greatly.


Negotiate what you can.

Finding out the price of other similar cars can help you to leverage a better out the door price. While dealers may point out that other comparable cars aren’t CPOs (and therefore don't come with the benefits of a CPO car) this knowledge can still help you to get a better deal. Some dealers may offer a low interest rate OR a low out the door price, in which case you will need to do the math and figure out what works out best.


Sign and drive.

When you iron out the details, you can finally enjoy your new car. If the interest rate isn’t exactly what you were hoping for, you can always contact Auto Approve to see if refinancing will secure you a lower rate.

That’s everything you need to know about certified pre-owned cars.

A certified pre-owned can help you get a great car for less than you would pay for a new car. If you are on a tighter budget and can’t quite afford the higher price tag, buying a non-certified used car and having it inspected by a mechanic may offer you some extra reassurance.


If you are overpaying on your car loan every month, contact Auto Approve! Our experts can help get you the best refinance rate possible and help you through the process. Contact us today to see how we can help!



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