A Certified Pre-Owned or Used Car: Which Is Better?

CARS.COM — Buying any vehicle carries risks, and the risks are greater with a used car than with one that’s new. With a used vehicle, you usually don’t know how it was treated by previous owners or what repair issues it has had.

Related: Latest Certified Pre-Owned Incentives by Automaker

Buying a certified pre-owned vehicle — one backed by the manufacturer rather than a dealer — can reduce the risks to other used cars, however, and the CPO benefits add value:

• Many CPO programs extend the original powertrain warranty and several add one year/12,000 miles or more to the original basic warranty. These CPO warranties can make buying an expensive extended service contract unnecessary.
• When the CPO warranty comes from the manufacturer, repairs can be done by any dealer for that brand — an important consideration if you move or when you travel.
• CPO warranties generally are transferable to subsequent owners (Lexus is one exception), a plus if you decide to sell the vehicle before its warranties expire.
• CPO vehicles come with roadside assistance and related benefits, such as towing, and some programs throw in free basic maintenance for a year or two.
• Free vehicle history reports are provided on CPO vehicles, and some manufacturers include buyback guarantees from Carfax or AutoCheck, the companies that issue the reports. If the buyer discovers that the vehicle had a salvage title or issues such as flood, fire damage or an altered odometer, Carfax or AutoCheck may buy back the vehicle under certain conditions.
• “Certified” means the dealer has certified to the manufacturer that it performed a comprehensive inspection and made necessary repairs to the vehicle for it to qualify for the CPO program. In addition, dealers pay a fee to the manufacturer (which varies by brand) for each vehicle they certify, so they have skin in the game.
• It is in the best interest of dealers and manufacturers to select only the cream of the used-car crop for their CPO programs because neither wants unhappy customers — and buyers expect more from a CPO vehicle. That means more peaches and fewer lemons.