How Much Does Certification Cost?
Certified pre-owned vehicles — vehicles checked and approved for resale by manufacturer programs — offer consumers peace of mind when they’re deciding on a used car. But just like anything else, buyers often pay a price for that added confidence.
Is the payoff worth the payout? According to Tom Kontos, vice president for industry relations and analytical services at Adesa Corp., "for a consumer, there are no absolutes in the used-car market."
Auto manufacturers tack on anywhere from 2 to 8 percent of the original used-car price for that certification sticker, he said. The higher-end the model or brand, the higher the percentage. On average, luxury buyers pay $2,100-$3,400 more for their certified used vehicles than buyers of non-certified luxury models spend, while non-luxury buyers pay between $300 and $1,750 for certification, according to CNW Marketing Research. For the most part, CPO premiums are on the rise, though budget, minivan and sports car segments are exceptions to that rule.
How much does certification cost? That varies by vehicle segment, but luxury cars had the highest average premiums in 2008.
"If you have gone over the vehicle thoroughly, or hired a mechanic to help inspect it, and combine that with an extended warranty, you could create a quasi-certified vehicle," Kontos said. "That may be a better way to go for people who have the ability and time to go through that themselves and save some money."
Jack Gillis, executive director of the Certified Automotive Parts Association and author of "The Car Book," distinguishes between those benefits. "Certification and the warranty are two different things," he said. Gillis said consumers need to understand the specifics of the warranty before they commit.
Although no current data suggest that certified used cars are vastly more reliable than their non-certified brethren, they do come with the suggestion of better roadworthiness.
"They generally represent the 'better' used cars available to the dealer," Gillis said. "They come with the implication that someone is going to take responsibility to check them out for you in advance."
Manufacturers place restrictions on what cars can be certified and offer multipoint inspection processes that vary from program to program. (See the Cars.com Certified Pre-Owned Program Guide for details).
The number and location of certification points differ by program. Some automakers say they have a 100-plus-point certification system, while others tout 200-point programs. Don't let the numbers fool you. Programs may simply break out the certification measures more granularly in an attempt to look more thorough.
Gillis cautions against putting too much stock in certification itself. Inspection checklists "should not be relied on as precise indicators of the car's condition," he said. "They are best used as a barometer to point you to a better used car."
One bonus of certification is that it gives car shoppers a purchasing experience they would otherwise be unable to attain.
"Someone might not be able to afford a new Lexus but might really like to get into that category of vehicle," Kontos said. "Certified pre-owned programs allow them to go to the dealership and have an experience similar to the one they would have if they were purchasing a new car."
Additionally, the manufacturer hopes these buyers might consider a new Lexus in the future under improved financial circumstances.
"CPOs provide a new category of entry-level vehicle," Kontos said, "especially for the luxury automakers."
Purchasers benefit, too. CPO programs create vehicles with higher resale values, providing increased bargaining power come trade-in time.
Reduced-rate financing options are also available for CPO purchasers (see the Cars.com CPO Incentives page for current deals). While you may not find the zero-percent deals occasionally offered on new vehicles, you will find low interest rates (some as low as 1.9 percent) on many certified models.
By Cars.com Staff