Is a CPO Vehicle for You?

September 16, 2020 by First Federal Bank

CPONearly 30 years ago, several automakers began implementing a new program at dealerships: instead of auctioning off trade-ins and other brand-new returned vehicles, they would resell them with added benefits. These vehicles became known as Certified Pre-Owned vehicles, and the CPO program was born.

Today, almost every major automaker offers this program to buyers, and it has become an appealing way to acquire newer vehicles for less money. Participating in a CPO program also means avoiding new-vehicle depreciation and a guarantee of quality, among other perks. If you’re currently looking to buy a new vehicle without breaking the bank, read on to see if a CPO vehicle is right for you.

How the program works

CPO vehicles aren’t just any used vehicles returned to a dealership. In order to qualify for the CPO program, a specific vehicle must meet a list of strict requirements. These requirements differ from one automaker to another, but most include such factors as the vehicle’s age, lifetime mileage, and overall condition. According to U.S. News & World Report, automakers like Toyota require that a vehicle must be no older than seven years and have less than 85,000 miles to qualify. If these specifications are met, the vehicle must undergo a 160-point inspection, and a detailed vehicle history report is created. Once all of this is done, the vehicle can officially be sold as part of a dealership’s CPO program.

Benefits of a CPO

The biggest benefit to buying CPO is the affordability. If you’re interested in a specific vehicle that’s just out of your price range while brand new, CPO may be worth exploring. For less money, you could drive your preferred vehicle, in an ideal condition, off the lot. Beyond the financial benefits, most automakers offer a number of enticing benefits as part of their CPO programs. Cars.com says that depending on which automaker and dealership you choose, these perks can include a variety of warranties, free repairs, and services like free roadside assistance, travel-reimbursement protection and even complimentary loaner vehicles. Be sure to research your preferred manufacturer’s CPO program to better understand what bonuses you’d be receiving.

Understanding the price

An important thing to remember about CPO vehicles is that they are not treated, sold, or priced like non-certified used vehicles. Due to the rigorous inspections and reconditioning each CPO vehicle must go through, their price point tends to be higher. Non-certified used vehicles also lack the extensive extras given to those in the CPO program. It may cost you a bit more, but buying CPO will guarantee you protection and perks at a price point that is still lower than buying the same vehicle brand new. It’s also worth remembering that negotiating the price of a CPO vehicle is no different than doing so with a new vehicle. Don’t be afraid to seek the best deal possible at the dealership of your choice.

Thanks to the promise of affordability and long-term benefits, buying CPO remains a popular choice for those looking to acquire a new car for less. By looking at the available incentives and evaluating your own finances, you’ll know if a CPO vehicle is right for you.

Categories: Financial Education, Lifestyle

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