Car Buying

Is a CPO Better Than a New Car?

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author photo by Doug DeMuro October 2014

If you're interested in buying a vehicle, you're searching for either a new or used one -- that much is obvious. For drivers who aren't sure whether they should go with a new or used car, an interesting alternative is available: certified pre-owned (CPO) vehicles, which are a few years old, include a manufacturer warranty, and typically cost a lot less than a brand-new model. On paper, this seems like a great idea. You get the best of all worlds: a credible warranty for your vehicle without having to pay the full price for a new one. But is buying a CPO vehicle really better than buying a new one? We took a look.

Consider Warranty Length

Although some car shoppers may be quick to jump at the chance of getting a CPO vehicle with a manufacturer warranty and a big discount compared to the price of a new vehicle, there's one issue with warranty coverage: CPO cars tend to have shorter warranty terms than new ones.

Here's an example of what we mean: Most certified pre-owned programs offer the balance of a factory warranty, plus an extra year or two of coverage. So a certified pre-owned car that's 4 years old might be at the end of its factory warranty -- and that means the only warranty you'll get will be an extra year or two of certified pre-owned coverage. In other words, by choosing a certified pre-owned car, you'll have less warranty coverage on a vehicle that's already starting to age -- and that means problems are more likely to occur than when a car is new.

Not New Anymore

Another important thing to consider is that shoppers who enjoy the experience of owning a brand-new vehicle won't quite find that in a certified pre-owned model. A CPO car's design may be outdated or heading for replacement, for example, and a CPO car probably won't have the same level of features and equipment offered by a brand-new vehicle. For instance, while a new car may have the latest in infotainment technology and in-car app capabilities, a certified pre-owned model might fall short by offering 2- or 3-year-old technology, depending on the car's age.

It's All Economics

As for whether or not you should get a certified pre-owned vehicle rather than a new one, we think it all comes down to economics. Specifically, do you think a new car is worth that much more than a certified pre-owned vehicle when you consider the two head-to-head?

For some shoppers who really enjoy gadgets and the latest technology, the new car might win since most new models offer more equipment and more modern features than their 2- to 4-year-old predecessors. Meanwhile, anxiety-prone shoppers who don't want to have a car without a warranty may also want to choose the new model because it will take longer for its warranty to expire. Because a new car is indeed newer, it will probably have fewer problems in the meantime.

As a result, we can't say for sure that certified pre-owned cars are better than new ones, or vice versa, but they certainly present a compelling argument that should convince even the most fervent new-car shoppers to consider a used model.

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.
Is a CPO Better Than a New Car? - Autotrader