Yahoo Finance These Are the Good Things You Get with a CPO Vehicle
You have a stack of brochures and car magazines, and you're burning up the internet as you search for a new ride. You're surprised at how high new-vehicle prices have crept in only a couple of years. Further research reveals that after a few years of depreciation, lightly used vehicles sold privately offer far more reasonable prices. But those vehicles come without a warranty—or only the remainder of the factory warranty, which is usually a short period and not many miles. Buy one of those vehicles privately, and you risk getting bit by somebody else's problems, unless you're handy with a trouble-code scanner and a toolbox.
There's another safer but still affordable path: certified pre-owned, better known by the initialism CPO.
A growing number of shoppers are selecting CPO vehicles. Almost every brand (even exotic-car manufacturer Bugatti) offers a CPO warranty program these days. CPO programs have many advantages, but how each provides protection to the buyer and what is included vary widely. Here are the advantages to purchasing a CPO vehicle and the details to consider before buying your next car or truck.
Advantage #1: A CPO Vehicle Costs Much Less
The primary benefit of going the CPO route is that you're purchasing a solid two- or three-year-old car, SUV, or truck that has already depreciated significantly. Some CPO vehicles are even available with a low-interest lease, similar to a new car's. A two-year-old CPO vehicle is typically 25 percent less expensive than a brand-new version of the identical vehicle. And four-year-old CPO vehicles can be marked down by as much as 40 percent.
Advantage #2: You Get a Manufacturer Warranty
Like new cars, CPO vehicles come with a manufacturer-backed warranty. Most automakers offer a combination of a limited powertrain warranty and a bumper-to-bumper warranty. These vary significantly when it comes to deductibles, coverage length, and which components or systems are covered. Typical deductibles are $50 to $100. Some CPO powertrain warranties last up to 100,000 miles. If you suspect you might sell the vehicle before the warranty expiration, check if there's a new-owner transfer fee. (BMW has a $200 charge.) Read the policy's fine print, and be aware that some so-called certified vehicles aren't true CPO deals, in that they carry only a dealer's warranty, not the carmaker's. That usually limits where the vehicle can be fixed. And if the dealership closes, the dealer warranty is useless. Stay away from those.
Advantage #3: CPO Vehicles Undergo a Thorough Inspection
Vehicles that qualify for sale in CPO programs are typically several years old and have raked up relatively few miles—odometers showing 36,000 miles or lower are not uncommon. Their health is further confirmed by a vehicle-history report that also includes the vehicle's VIN code and title status. Another critical factor in any CPO purchase is the required comprehensive inspection by a factory-trained mechanic. (Make sure to get a copy of it for your records.) Most of these inspections review more than 120 items, and at least one maker (Audi) checks 300 before putting a CPO vehicle up for sale. Any issues that are found are repaired.
Advantage #4: Roadside Assistance
Although buying a CPO vehicle should significantly reduce the chance of a breakdown, some CPO policies (like those at FCA, Mercedes-Benz, and Lexus) also offer 24-hour roadside assistance that includes towing, jump-starts, and even lock-out help. General Motors provides two free maintenance visits in its CPO Scheduled Maintenance program. (It's important to ask if these benefits are free or if they can be added for an extra charge.) Some manufacturers even offer financial assistance if a trip away from home is interrupted. Hyundai will reimburse owners up to $100 per day and up to $500 per occurrence if a breakdown happens more than 150 miles from home. Other makers offer car-rental allowances of up to $175 per breakdown.
Advantage #5: Free Trial Subscriptions
Several CPO deals come with free trials of special services. Even mainstream brands, such as Honda, Ford, Hyundai, and FCA, include three months of SiriusXM satellite radio. GM's CPO program also offers an XM radio trial and tosses in three free months of its handy OnStar Guidance plan for turn-by-turn navigation.
Advantage #6: A Vehicle-Return Policy
One last benefit to look for in a CPO contract is the option to swap out if you and the new vehicle don't get along. Some CPO policies say you can come back within a limited time or mileage and trade for something else from the brand. GM gives buyers three days or 150 miles to figure out whether the CPO car or truck they bought is really the one they want or if they made a mistake.
Keep in mind that a CPO vehicle carries a price premium over the same non-CPO model; there's a cost to getting an extended factory warranty and a carefully inspected used vehicle. And there often aren't as many models to choose from, since fewer vehicles can pass the rigorous inspection and mileage requirements to qualify for a CPO program—though the selection is still usually quite good. But the cost savings, peace of mind, and benefits you get in a CPO program can make buying a certified pre-owned vehicle a compelling value when compared with a brand-new one. A CPO deal is well worth considering.
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