A certified pre-owned car has the price and depreciation of a used car and the warranty of a new car. Also known as CPO, certified pre-owned is a term used in the automotive industry for late-model, low-mileage used cars that have undergone evaluation and have factory warranty and/or service contract for backup.

So if you’re wondering, what is the difference between certified pre-owned and the average used car? The answer is nothing much in terms of the fact that both are “used”. However, certified pre-owned is generally in better shape compared to an average used car since cars labeled as “preowned” has to pass strict standards. Also, certified pre-owned vehicles offer insurance which is important especially in second-hand vehicles.

Where are they from?

Certified pre-owned are mostly cars that were leased new instead of sold. And since it is leased, customers are expected to take care of the car to avoid extra charges for wear and tear at the end of the lease. It started in the 90s during the leasing boom when automakers needed to sell low-mileage, off-lease cars.

What will I get from it?

Most pre-owned programs have warranty, an inspection, and customers have the option to return the car if it does not satisfy him or her. This is the biggest advantage that any car buyer could have. Consider buying for the price of a used car with the warranty of a brand new car.

How does manufacturers make money out of it?

So far, it sounds too good to be true for the customers. What about the manufacturers? Manufacturers test and give warranty to certified pre-owned cars not because of charity but because of profit. With the traditional, lucrative trade of used cars, manufacturers make little to no profit. With the advent of CPOs, manufacturers and dealers now get a cut from the sale of each used car through the certified pre-owned tag. And the buyers pay for that.

So, is it worth it?

Certified pre-owned cars may sound like a bargain. But it’s not. It is, however, a smarter choice, a safer alternative, and a better purchase compared to an average used car. It is also considered as the third category along with used and brand new cars. So if you prioritize insurance, certified pre-owned is definitely worth your extra money. Consider the extra pay is worth the insurance that you will get your money’s worth. On the other hand, if you consider the price as compared to used cars, then certified pre-owned is not the best for you. You may take a gambl out of buying plain used cars, an option that is pretty risky for your hard-earned money.

Tags: deals in Wisconsin, customer centric car dealer, preowned suvs

Bookmark It

Hide Sites