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What Are the Drawbacks of Certified Pre-Owned?

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author photo by Doug DeMuro October 2014

Although we often recommend that drivers consider certified pre-owned (CPO) vehicles in addition to traditional new and used cars, CPO vehicles aren't always the right choice for everyone. To explain what we mean, we've listed a few of the potential drawbacks that you should consider before buying a certified pre-owned vehicle.

More Expensive?

One issue you may encounter as you search for a good new or used car is that certified pre-owned vehicles tend to be a little more expensive than traditional used cars. There are a few reasons for this, but the primary one is that automakers need to charge a little more for a certified pre-owned car in order to make it financially viable to offer a warranty.

What you'll need to consider is just how much more you're willing to pay for that CPO warranty. For instance, if you're thinking about buying a used car without a warranty that's priced at $30,000 or a vehicle with a CPO warranty for $32,000, you'll have to consider whether the warranty is worth that extra $2,000. For some reliable cars, it may not be. For cars that are notoriously unreliable or for luxury vehicles that can be expensive to fix, it might be worth it to spend the extra $2,000.

Warranty Already Included?

Something else you should consider before you sign the papers on a certified pre-owned car is whether the vehicle has any manufacturer warranty left. If it does, and if you don't plan to keep the car very long, it may not be worth spending the extra money for a certified pre-owned vehicle.

As an example, consider two different used 2013 Honda CR-V models. One is available from a Honda dealer with a certified pre-owned warranty, while the other is a regular used car with no warranty. In this case, the vehicle with no warranty actually includes the balance of the manufacturer warranty, which covers the entire car through 2016 and the powertrain through 2018. If you don't plan on keeping the car that long, spending the extra money on a certified pre-owned warranty might be a bad idea.

Limited Selection

Since certified pre-owned vehicles can be sold only by authorized dealerships from the same brand as the vehicle, you might find that certified pre-owned vehicle selection can be a little thin. For example, if you have only one Ford dealership near you, you'll be at that dealer's mercy when it comes to certified pre-owned selection unless you want to drive a long distance to another dealership. Buying a traditional used car, meanwhile, opens up a wider selection and a greater range of possibilities.

Consider an Aftermarket Warranty

Another drawback to a CPO warranty is that it isn't always the least expensive option. In most cases, dealerships offer a wide variety of aftermarket warranties for pre-owned vehicles, and you can always opt for one if you're nervous about potential issues down the line. Sometimes this is a cheaper option than spending the extra money on a certified pre-owned vehicle from a dealership.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
What Are the Drawbacks of Certified Pre-Owned? - Autotrader