Why Buying a Certified Used Car Is Cheaper Than You Think
When it comes to buying used cars, a Certified Pre-Owned vehicle can be pretty tempting. CPO cars come with a warranty, and while other used cars can be bought with a warranty, the idea that these cars have been inspected by the dealer to make sure they meet the standards set by the manufacturer is comforting. CPO cars can also be serviced anywhere in the country because they have a manufacturer warranty, not one from a specific dealership or third party.
The stigma, though, is that in order to get a CPO car, you have to pay significantly more than you would if you just went out an bought a regular used car. In some cases, that’s probably true, but iSeeCars.com just released a report on a study it did of CPO programs, and in a lot of cases, the premium you pay for a car that’s Certified Pre-Owned is a lot less than you would think.
In fact, dealers charge an average of only $722 more for a CPO car than they do for a comparable, non-certified used car. Most car brands had a CPO premium of less than $1,000, and perhaps even more interestingly, nine brands charged a premium of less than $500.
Jeep’s Certified Pre-Owned program is cheapest of all, costing only an average of $289 extra. It’s brand mates ended up being the second and third cheapest, as well, with Dodge and Ram costing $346 and $354 respectively. Subaru, Honda, Mazda, Chrysler, Chevrolet, and Buick all round out the list of brands on the sub-$500 list. At $447, Buick was the most expensive brand to make it, but that still only worked out to a 2.2% increase in price.
“Looking at the manufacturers with what are typically considered the best CPO programs, our analysis found some real bargains that can make buying a certified pre-owned car very compelling,” said Phong Ly, CEO of iSeeCars.com. “The data indicates that consumers are more likely to find a CPO car at a highly competitive price from the top brands on our list. However, they should also pay careful attention to what’s included in the certification.”
As Ly points out, there’s more to a great deal on a CPO car than just paying a low premium for it. Brands all have their own programs, and what’s included can vary widely between brands.
FCA brands landed four of the top nine slots on the list, but that doesn’t necessarily make its CPO program the best. Its cars come with a three month or 3,000-mile comprehensive warranty, and it increases the factory powertrain warranty to seven years instead of five, but it once your car hits 100,000 miles, the warranty is done. The deductible for repairs is also $100, which is pretty high.
GM, on the other hand, had two brands on the list – Chevrolet and Buick. CPO buyers get a two year or 24,000-mile scheduled maintenance plan, and owners don’t have to pay a deductible for any repairs. Owners may have to pay a bit more up front than if they had bought a Jeep, but that difference could very easily be made up over the course of a few repairs.
One of the most highly-ranked CPO programs in the entire industry, though, is Honda’s. Intellichoice has ranked Honda as a top five CPO program for 14 of the last 16 years, and incidentally, it’s also number five on this list as well. For your money, you get a 12-month, 12,000-mile comprehensive warranty for cars whose new car warranty has already expired, and repairs have no deductible. Another brand to make the list, Mazda, has a very similar program as well.
“While our data shows that buying a certified pre-owned car doesn’t cost much more in many cases, the benefits of buying one should be carefully considered, as some CPO programs don’t have as much value as others. Some models also have higher average premiums, and it may be possible to find a much better deal on a non-certified car if you shop around and get an independent mechanic to make an inspection,” Ly said.
Not every CPO car is going to be an amazing deal, but the premium that you pay over a non-certified used car is definitely a lot less than most people think. If you’re interested in buying used but want to avoid the risk of costly repairs, maybe you should give CPO programs some more serious consideration.