Many people choose to purchase a used car rather than a new car in order to save money. But other car shoppers are afraid to purchase a used vehicle because they worry that the car will have problems since it’s already been driven for so many miles. The certified pre-owned designation was created to make these car shoppers feel more comfortable with the idea of purchasing a used vehicle.
If you’re looking to buy a used vehicle, you’ll have to make a choice: Should you get a certified or non-certified used car? What is the difference between a certified car and a used car? What are the pros of cons of purchasing certified pre-owned cars vs. used cars?
What is the Difference Between Certified and Pre-Owned Cars?
Do not start shopping for a used vehicle until you understand the difference between certified and pre-owned cars.
A manufacturer certified pre-owned vehicle is a low mileage car, truck, or SUV that has been inspected from headlights to rear bumper and includes an extension of the original manufacturer warranty.
A non-certified used car may not have been inspected and will not come with an extended factory warranty. You can get a non-certified used car through any auto dealer — or directly from an owner.
Will a Certified Used Vehicle Offer a Smoother Ride?
A manufacturer certified used vehicle can offer peace of mind of knowing you’re buying a high-quality used car. And you’re covered if something goes wrong down the road.
Specific pluses include:
- A multipoint inspection: Requirements vary by manufacturer, but these inspections generally start by looking at a report of the vehicle’s history to make sure the car has not been flooded, stolen or wrecked in the past. The dealer then checks the outside of the car and does a test drive to verify it’s a smooth ride. If everything looks good, a mechanic will inspect the brakes, engine, transmission, steering, suspension and other components, according to J.D. Power, a consumer market research company that rates cars. The technician will also check various systems, from air conditioning and lights to the infotainment system and safety features (i.e., back-up camera). A car must pass this inspection in order to become a manufacturer certified pre-owned car.
- Better condition: Most certified pre-owned vehicles are only a few years old. Because they are relatively new, these vehicles are typically in better condition than non-certified used vehicles.
- Easy repairs under warranty: Manufacturer certified pre-owned cars typically come with excellent warranty coverage. For example, Ford offers a comprehensive warranty that covers one year or 12,000 miles, whichever comes first — which covers more than 1,000 components — plus a seven-year/100,000-mile powertrain warranty. If you have a covered problem with the car while it’s still under warranty, the dealer will make the repairs at no charge. This can make it easier to get your car fixed, especially if you don’t know a good mechanic.
- Other certified pre-owned perks: You might get other bonuses as part of the deal. For example, Toyota offers one year of roadside assistance honored at more than 1,400 U.S. Toyota dealers. The big disadvantages are that you will have fewer cars from which to choose and will pay around 6% to 8% more for a manufacturer certified used vehicle than you would for a non-certified vehicle of the same make and model in similar condition with comparable features.
- Financing deals: Some automotive manufacturers offer better rates on financing for certified pre-owned vehicles. The difference in rates can vary depending on the manufacturer. If the rate for certified pre-owned vehicles is significantly lower, this could make up for the price difference between certified and pre-owned vehicles.
There’s no doubt that there are many benefits to purchasing a certified pre-owned vehicle. It’s important to remember, however, that a certified pre-owned car is still a used car. You should do your due diligence before purchasing any used vehicle, regardless of whether or not it is certified. Do not assume that there are no issues with the vehicle simply because it has met the manufacturer’s certification standards.
Is a Non-Certified Preowned Car More Your Speed?
On the other hand, buying a non-certified pre-owned car can be a better deal and give you more control in the buying process. Specific advantages include:
- Substantial savings: There is a cost associated with thoroughly inspecting a vehicle and making necessary repairs. For this reason, non-certified pre-owned vehicles are typically priced lower than certified vehicles. If you’re trying to stick to a small budget, it may be best to look for a non-certified pre-owned vehicle.
- Greater control: Do you like to be in the driver’s seat of car buying and ownership? You might prefer to have your own mechanic conduct an inspection before the purchase and to take the vehicle to that shop for any necessary repairs. The main upside of buying a certified used car is lower risk. You can drive down the road and feel good knowing you’re covered by the original warranty for a while. On the other hand, a non-certified car can expand your buying options and save you money. Just make sure you get any non-certified vehicle checked out thoroughly before you buy.
- Easier to shop for: If you want to purchase a certified pre-owned Toyota, you must visit a Toyota dealership. But if you want to purchase a non-certified pre-owned Toyota, you can visit any used car dealership in your area. This makes shopping for a non-certified pre-owned vehicle much more convenient.
What is the Price Difference Between Certified Pre-Owned and Pre-Owned Vehicles?
There are a number of benefits to choosing a certified pre-owned vehicle instead of a non-certified pre-owned vehicle. But you must be willing to pay more to enjoy the benefits of owning a certified pre-owned vehicle.
The price difference between certified pre-owned and pre-owned vehicles can be substantial. You will pay on average about $1,000 less for a non-certified used car than you would for a comparable certified used car, according to Kelley Blue Book. And Edmunds puts that number at $1,500.
Savings can vary by type and size of vehicle, from a few hundred dollars for a basic compact car to thousands of dollars for a luxury convertible or SUV. According to the Senior Vice President of Black Book, you should expect to pay about $850 more for a certified pre-owned mid-size vehicle and about $3,000 more for a certified pre-owned luxury vehicle.
Can You Negotiate the Price on Certified Pre-Owned Cars?
Certified pre-owned cars are typically priced higher than non-certified used cars. But this does not mean that their prices are set in stone. The price of any used vehicle—regardless of whether or not it is pre-certified—is negotiable.
If you are thinking about purchasing a certified used vehicle, it’s in your best interest to approach price negotiations just like you would if the vehicle wasn’t certified.
What Requirements Must A Vehicle Meet to Earn the Certified Pre-Owned Designation?
Each manufacturer sets its own standards for certified pre-owned vehicles. And you can only buy a certified pre owned vehicle from an authorized dealer.
For example, you have to go to a Honda dealership to get a certified pre-owned Honda Civic. Dealers may also have their own certified pre-owned (CPO) vehicle programs with their own standards, so find out if you’re getting a manufacturer certified or a dealer certified used car.
What Does Honda Certified Mean?
Every manufacturer also establishes its own benefits program available to those who purchase certified pre-owned vehicles.
To better understand the meaning of the certified pre-owned designation, it’s helpful to look at the standards and benefits established by one automotive manufacturer.
For example, if you purchase a Honda certified pre-owned vehicle, this means:
- You will have access to the Sirius XM service for 90 days.
- You will have access to Honda’s concierge service.
- You will get Honda’s Trip Interruption benefits, which help car owners who are dealing with mechanic issues when traveling away from home.
- You will get two complimentary oil changes within the first year of car ownership.
- You will have access to Honda’s Roadside Assistance service.
- You will get a copy of the CarFax or Autocheck vehicle history report.
- The vehicle will be covered by a 7-year/100,000-mile powertrain warranty.
- The vehicle will be covered by a 5-year/86,000-mile non-powertrain warranty.
- The vehicle has passed a 182-point inspection. The complete inspection report is available for download.
Because each manufacturer has established different standards and benefits related to the certified pre-owned designation, it’s important to do your research before purchasing one of these vehicles. This way, you can make sure you are satisfied with the specific standards and benefits established by the manufacturer before purchasing a certified pre-owned vehicle.