Car Buying

CPO or Used: What's Right for You?

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author photo by Doug DeMuro October 2014

If you're looking for a late-model used vehicle, then you're probably trying to decide between a certified pre-owned (CPO) car and a regular used car with no additional manufacturer warranty. Which one is better? To help you choose which is the best fit for you, we've listed some pros and cons of both CPO vehicles and standard used cars, and we've provided a few opinions on why you may want to choose one or the other.

Certified Pre-Owned: Benefits and Drawbacks

The main benefit of a certified pre-owned car is obvious: It comes with a manufacturer-backed warranty that can extend the standard warranty's life for several years. For some drivers, this alone is all that needs to be said, as a certified pre-owned warranty offers some serious peace of mind that an out-of-warranty vehicle -- or even a vehicle with a third-party warranty -- just doesn't offer.

Another major benefit of a certified pre-owned vehicle is that dealerships tend to select only the best cars for CPO eligibility. As a result, you'll never have to worry that your new vehicle has unseen flaws lurking under its hood.

And the drawbacks? The chief downside of buying a car with a certified pre-owned warranty is cost. Since dealerships know that they're offering the most reliable vehicles around, most charge a premium for their certified vehicles. The result is that a certified pre-owned car will often be more expensive than a similar vehicle without a certified pre-owned warranty -- even if the two cars are largely similar otherwise. Of course, this means that you'll end up paying extra for the warranty, even if you never use it.

Used Car: Benefits and Drawbacks

There are a few benefits to buying a used car without a CPO warranty. One is cost. Since you aren't getting a manufacturer-backed warranty, you probably won't pay quite as much as a CPO car with that level of coverage.

Another thing to keep in mind is that you don't always need to pay extra to get a warranty. If the car you're considering is new enough, for instance, it may offer some remaining factory warranty. For some drivers, that may be all the peace of mind that's necessary to sign the papers. Obviously, check the fine print, since full warranties don't always transfer to the second owner, but in many cases, a late-model used car will still have some factory warranty coverage left.

The major drawback of buying an out-of-warranty used car is, of course, that you won't get a warranty. For drivers prone to anxiety or those who are hard on their vehicles, this might not be the best course of action. It may also be a bad idea if parts and labor costs for the vehicle you want are especially expensive.

Which Should You Choose?

In the end, choosing between a certified pre-owned car and a regular used car can be a difficult decision. In our opinion, we'd only choose a CPO car if the circumstances were right. Most importantly, we'd always get a certified pre-owned warranty for a notoriously unreliable vehicle or one that includes a lot of complicated technology. We'd also spring for the warranty from most luxury brands, since parts and labor costs can be expensive. We suggest getting a certified pre-owned warranty if you're hard on your vehicles -- in a cold-weather climate, for instance -- or if you spend a lot of time in stop-and-go traffic.

With that said, we wouldn't bother with a certified pre-owned warranty on most mainstream brands. Modern cars are more reliable than ever, and we don't think the warranties are completely necessary, especially if the car that you're considering still has some remaining factory warranty coverage.

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.
CPO or Used: What's Right for You? - Autotrader