Business & Tech

CONSUMER ALERT

What’s the deal with ‘certified preowned’ cars?

Used car dealership. Fragment of a windshield

istock

The value of a “certified preowned” designation depends on the model, and the manufacturer’s warranty.

A friend was recently considering trading in her SUV for a compact car. She wondered whether a so-called certified preowned vehicle would give her the quality she wanted at a better price than buying new. I wondered whether the certified preowned designation was just a fancy marketing term designed to get consumers to spend more on a used car.

So I started researching. The answer, it seems, falls somewhere between her optimism and my cynicism.

Advertisement

First, the basics: To be labeled “certified preowned,” or CPO, a used vehicle must meet certain standards laid out by the automaker. Many of these vehicles have been previously leased and therefore have been well maintained, with low mileage. CPO vehicles generally come with a warranty, either the remainder of the original warranty or supplemental coverage provided by the car company.

This peace of mind comes at a price: Certified preowned vehicles cost, on average, $1,500 more than uncertified used cars, according to automotive website Edmunds.com.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

So are they a good buy? If you are eyeing a luxury car, quite possibly, says Matt DeLorenzo, managing editor for automotive research company Kelley Blue Book. At higher price points, the discount over a new car is more significant. And luxury vehicles are likely to have adaptive cruise control, entertainment systems, and other advanced features, making the inspection and the warranty more appealing.

“Dealers will tend to cherry-pick the cars that will give them the least trouble,” DeLorenzo says. “There’s just so much more that can go wrong in a luxury car.”

Drivers seeking serviceable, budget-friendly transportation, however, probably shouldn’t bother with a CPO, he said — there are fewer advantages for the added cost. Ask yourself how much repair work you could pay for with the extra money you’d spend for a certified vehicle. Plus, some of the most common more affordable cars, like Hyundai and Kia, already have 100,000-mile warranties, making the protection offered by a CPO designation unnecessary in many cases.

Advertisement

If you do decide to consider a certified preowned vehicle, make sure to read the fine print. Each automaker has its own inspection standards and warranty terms. For instance, Toyota boasts a 160-point inspection, while Audi promotes a process that considers more than 300 items. Make sure you know what the certification covers so you can decide whether it is worth paying a premium.

Have a consumer question or complaint? Reach Sarah Shemkus at seshemkus@gmail.com.
Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
You're reading  1 of 5 free articles.
Get UNLIMITED access for only 99¢ per week Subscribe Now >
You're reading1 of 5 free articles.Keep scrolling to see more articles recomended for you Subscribe now
We hope you've enjoyed your 5 free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.