What to know about CPO: Get the lowdown on certified pre-owned vehicles

Since cars lose as much as 19 percent of their value to depreciation after just one year of ownership, it’s possible to net big savings by purchasing a used vehicle. However, there is quite a bit of variance in the used cars that are on the market. Some are very old and have heavy mileage, with lots of wear and tear. On the other end of the spectrum, some used cars are newer, meticulously maintained, and in pristine condition.


There are some used-car buyers who are only interested in models that are in excellent condition. If you’re one of them, purchasing a certified pre-owned (CPO) vehicle makes a lot of sense.

CPO basics

What to know about CPO: Get the lowdown on certified pre-owned vehicles

CPO vehicles are subject to an inspection and reconditioning process that addresses everything from the car’s brake pads to its engine performance.


A CPO vehicle is a used car that is sold by a dealer after being thoroughly inspected by a skilled mechanic. The inspection process evaluates the vehicle from top to bottom, and it’s intended to make sure that the CPO program includes only those vehicles that meet certain minimum quality requirements. The inspection addresses the following categories:

Background and maintenance.Here, the vehicle’s age, mileage and service history are considered. Many CPO programs will disqualify a vehicle if it exceeds certain age and mileage limits, or if it has inconsistent or incomplete maintenance history. A vehicle history report is run to see if the vehicle has suffered major damage or been involved in accidents.

Wheel assembly.This involves taking a look at tire tread depth and wear, as well as inspecting the car’s brake pads and rotors.

Overall body condition and fit and finish.In this portion of the evaluation, exterior components such as the bumpers, hood, roof, windshield, and side mirrors are examined to make sure they meet certain standards. Interior components such as the seats, cup holders, headliner, glove box and floor mats are scrutinized. The vehicle’s trunk or cargo area is also put under the microscope.

Mechanical functionality.Cars have numerous mechanical parts, and it’s important that these parts work as expected. This part of the evaluation tests features such as the car’s airbags, seat and headrest functions, seatbelts, alarm functions, steering, trunk lock, and exhaust system to ensure they’re in good working order. Battery voltage and fuel levels are checked, and the used car is inspected for fuel leaks.

Road test.Finally, the vehicle is taken on a road test to see how it performs. The evaluator considers features such as the car’s audio system, driver’s seat functions, horn, heating and air conditioning, and headlights. The vehicle’s handling, engine performance, and gear-shifting capabilities are assessed.

If a vehicle passes all aspects of this inspection, it is accepted into an automaker’s certified pre-owned vehicle program and is offered for sale.

Benefits of purchasing a CPO vehicle

What to know about CPO: Get the lowdown on certified pre-owned vehicles

CPO models have to meet certain minimum requirements in areas such as age, mileage, and maintenance. Shopping in this market can help you narrow your list of qualified candidates and save you time in your vehicle search.


CPO models offer useful benefits for used-car shoppers:

A more streamlined used-car search.If you’re searching for a used car on the open market, you’ll encounter a wide variety of vehicles, and not all of them will be in the best shape. Using this method, if you’re looking for a well-maintained used car, you could easily spend several hours trying to winnow your list of candidates to those models that are in prime condition.

Purchasing a CPO vehicle helps you avoid this hassle. By shopping on the CPO market, you’re limiting your search to newer used cars that have met certain standards regarding upkeep and care. Focusing on this segment of the used-car market will simplify your search and reduce the time spent undertaking the process.

Generous warranty protection.One of the benefits of purchasing a new car is the warranty protection these vehicles offer. Some CPO models offer similar warranty perks. Certain CPO programs enhance the vehicle’s basic and powertrain warranties to provide extended coverage that gives shoppers peace of mind regarding their used-car purchase.

Thorough inspection and reconditioning.CPO cars have benefited from thorough inspection and reconditioning. Many CPO programs assert that their vehicles are in like-new condition, and they go to great lengths to make sure their models live up to this expectation.

Roadside assistance.It’s no fun finding yourself stranded on the side of the road, and used cars put you at greater risk for this unfortunate occurrence. Many CPO programs offer the perk of free round-the clock roadside assistance spanning the length of the vehicle’s basic warranty coverage. This service covers more than just vehicle breakdowns. It will assist you if you’re locked out of your vehicle or if you run out of gas.

Appealing financing rates.The one drawback to purchasing a CPO vehicle is that these models are a bit costlier than other used cars. This makes sense when you consider the time and expense that go into the inspection and reconditioning process. Fortunately, CPO models bring the benefit of low-interest financing. Many CPO programs offer financing rates that are just as low as those offered with new cars, and this can save you money on your vehicle purchase.

Leasing availability.With many used cars, purchasing is the only option, and this isn’t the best choice for some car shoppers. Some CPO programs open their vehicles up to the leasing market. Leasing is a relatively low-cost option, and it may allow you to drive a more expensive used car than you wouldn’t have been able to afford if you had purchased the vehicle.

Two types of CPO programs

There are many CPO programs out there, but they don’t all offer the same benefits. It’s important to have a clear understanding of who is backing the program. A CPO program may be backed by the dealer, or it may be backed directly by the manufacturer of the vehicle.

Manufacturer-backed CPO programs.These CPO vehicles have been inspected and reconditioned by the manufacturer. Manufacturer-backed CPO programs have very strict guidelines when it comes to things such as age and mileage, and they are your best bet if you want the peace of mind that comes with knowing your used car has been thoroughly vetted. Cars that are part of these CPO programs come with warranties that are honored by the vehicle’s manufacturer.

Keep in mind that these CPO vehicles can only be sold by a manufacturer’s franchised dealer. In other words, if you’re looking for a used Honda that’s part of the manufacturer’s CPO program, you’ll only be able to find one of these models at a franchised Honda dealership.

Dealer-backed CPO programs.Cars that are part of dealer-backed CPO programs have been inspected by the dealer, but they are not subject to the same standardized inspection and reconditioning processes as vehicles included in manufacturer-backed programs. While many dealer-backed CPO cars come with warranties, these warranties aren’t backed by the manufacturer. Instead, they are extended warranties backed by third-party service providers.

Some of these warranties are satisfactory, but you’ll have to do your research to make sure the company backing the warranty is trustworthy and dependable.

It’s also important to remember that many third-party warranty companies wind up going out of business for one reason or another. If this happens to a company whose warranty you’ve purchased, your service contract will be worthless. You won’t face this risk with a manufacturer-backed warranty, since it’s unusual for an automotive brand to disappear completely from the marketplace.

Used-car cost savings with new-car perks

What to know about CPO: Get the lowdown on certified pre-owned vehicles

A CPO purchase allows you to benefit from cost savings provided by depreciation without missing out on certain perks that come with buying a new car.


If you’re a used-car shopper, depreciation is your ally. CPO vehicles allow you to reap the cost savings associated with purchasing a used car.

At the same time, CPO models offer many of the benefits associated with a new-car purchase, such as manufacturer-backed warranty coverage and low financing rates.

If you’re in the market for a high-quality used car, a CPO vehicle will likely be a satisfying choice.

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