A certified pre-owned (CPO) car offers some of the advantages of both new and used cars. It’s a pre-owned car, which means it’s already experienced some depreciation, meaning a lower price for you, but it’s also certified, which means it’s gone through a thorough inspection and comes with a manufacturer’s warranty and sometimes other perks depending on the brand.
A CPO car, truck, or SUV can be a great way to save some coin on a modern car while still getting plenty of peace of mind with a good warranty. Here are some ways to find a CPO deal this December.
The Older the Car, the Better the Deal
With very few exceptions, pretty much all cars go down in value starting the instant they’re driven off the lot by the first buyer. They depreciate more and more as each year goes by, meaning that generally, the older the car, the lower the value. This is good news for folks shopping for a CPO car because it means someone other than you is paying for a good chunk of the depreciation.
You won’t find any really old cars that are CPO — they’re all pretty modern. The farther back you can go in model years when looking at a CPO car, the more affordable pricing you’re going to find. Of course, the car is going to be older than a new one and have some miles on it, but the money it saves you from the depreciation is worth it.
Look for Cars From Their Current Generation
Part of the joy of buying a CPO car is that you get to drive a like-new car in its current generation at a lower cost than what you would’ve paid for a new car. However, if a car is all-new for 2019 or 2020, then shopping for a CPO car from 2018 or older takes some of the fun out of it. There might be some new features that the new car has that the certified examples don’t, or maybe you just really like the look of the new model and don’t want to settle for the older, aging design of the previous generation.
Do some shopping around and try to find the sweet spot of a car that’s new enough to still be fresh, but old enough to have gone through some depreciation. A good example is the Volvo XC90 which has been in its current generation since 2016 and looks just like a brand new 2020 model.
Luxury Cars Depreciate Faster
As a general rule, cars from luxury brands depreciate faster than cars from volume brands. That makes luxury vehicles an especially good value on the CPO market. It’s not unusual to find a certified luxury car that’s the same price, but quite a bit nicer than a new non-luxury car in the same segment. For example, it’s not hard to find a CPO Lincoln MKZ that’s just a couple years old for less than $25,000. The MKZ is a luxury sedan that is mechanically the same as the Ford Fusion and the starting price of a 2020 Fusion is $23,170. That means you can get a certified Lincoln for the same price or even less than a new base model of its Ford counterpart.
Now is also a great time to be shopping for a CPO sedan. Since SUVs have been exploding in popularity lately, sedans have been collecting dust on dealer lots while they’re outsold by crossovers. This is more good news for CPO shoppers, especially if you’re looking for a luxury sedan.
Look for Incentives
Not all manufacturers do this, but some automakers run incentives on CPO vehicles like they do for new ones. That means bonus cash, special financing deals, and sometimes even lease deals on certified models. It’s something worth looking into if you’re looking to finance a pre-owned car with a low interest rate or if you like the idea of a lease with an affordable monthly payment.
Finding a CPO deal this December can be a great way to give yourself a special gift this holiday season.