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Can a CPO Car Help You Get a Better Auto Loan Rate?

202304 cpo incentives 2 scaled jpg Weighing CPO auto loan rates | Cars.com illustration by Paul Dolan

A certified pre-owned vehicle offers several advantages compared to a non-certified used car. Most automakers include a multipoint inspection and extended warranty in the CPO program. They also often set limits for the vehicles’ age and mileage, which can add peace of mind and prevent surprise repairs down the road. However, one lesser-known perk to choosing a CPO car is the potential for lower financing costs — an important consideration as auto loan rates are on the rise.

Related: What Are the Best Perks of Buying a CPO Car?

Some banks and credit unions offer more favorable rates for newer used cars with low mileage regardless of whether they’re certified or not. Meanwhile, many automakers have special low financing rates specifically for CPO vehicles that come close to, or even match, rates for new cars. These incentives come with some stipulations, though: The deals are typically reserved for shoppers with excellent credit, and accepting the finance offer could hinder your ability to negotiate on the price of the vehicle.

Lower Rates for Newer Used Cars

ford maverick ecoboost fwd ford maverick ecoboost fwd 2022 24 cargo unloaded loaded scaled jpg (From left) 2022 Ford Maverick Lariat hybrid and XLT EcoBoost | Cars.com photo by Christian Lantry

According to Experian’s latest automotive finance market report, the average auto loan rate for a used car reached 10.26% in the fourth quarter of 2022, up from 8.22% one year prior. The average for new cars was estimated at 6.07% for the fourth quarter of 2022. Banks and credit unions determine a borrower’s auto loan rate based on a range of factors like credit score, whether the car is new or used, and its age. While we didn’t observe a clear distinction between CPO and non-certified used cars among the following lenders’ listed auto rates, there is some variation based on a vehicle’s age.

Navy Federal, the nation’s largest credit union, lists three auto loan categories on its website: new vehicles, late-model used (2022-24 model years with 7,500-30,000 miles), and used (2021 and older, or any vehicle with over 30,000 miles). The posted rates for new and late-model used cars are identical, ranging from 4.54%-5.04% for loan terms between 36 and 72 months. Financing for older used cars comes at a premium with rates of 5.44%-5.84% for similar loan terms.

Another example is PNC Bank, which lists the lowest auto loan rates (5.89%-6.49% for 49-60 months) for model-year 2022-24 vehicles that are at least $15,000, regardless of whether they are new or used. Meanwhile, the rate for older cars (model years 2015-17) ranges from 7.09%-7.69% for the same loan terms.

CPO Financing Incentives

Getting an auto loan for a CPO vehicle through the automaker’s finance division can yield a more favorable rate than a non-certified used car. Similar to their new-car financing incentives, many automakers have special low-rate offers for select CPO models. The following are a few such examples observed at the time of this writing; availability may vary by region, and all incentives are available for qualified shoppers with good credit.

  • GM: 3.9% rate for up to 36 months; 7.19% for 37-60 months; and 8.19% for 61-72 months on eligible Buick, Chevrolet and GMC vehicles
  • Ford: 6.99% for 60 months for select Gold and EV Certified vehicles
  • Honda: 2.99% for up to 36 months for select HondaTrue Certified+ and HondaTrue Certified pre-owned Civic and CR-V models
  • Hyundai: 3.99% for 36 months on select Hyundai Certified used Sonata, Kona and Santa Fe models
  • Toyota: 4.99% on select Toyota Certified models including the Camry, Corolla, Corolla Cross and RAV4

In comparison, Chevy’s new-car financing rates range from 0% to 5.3% for 72 months depending on the model; Honda’s range from 0.9% for 24-36 months to 4.9% for 49-60 months; and Hyundai’s rates range from 0% for 48 months to 5.99% for up to 72 months. Some automakers offer bonus cash offers in addition to the lower finance rates on select vehicles, which is rare to see for CPO cars. And like the CPO financing deals, new-car offers may be region-dependent and limit eligibility to qualified shoppers that finance with the automaker.

How to Get the Best Deal

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Auto loan incentives like the ones listed above can bring significant savings for qualified CPO shoppers with good credit. However, it’s worth noting that the average price of a certified used car can be thousands of dollars more than its non-certified counterpart, which may cancel out the benefits of the finance offer. As with any vehicle purchase, getting preapproved for an auto loan before buying a CPO car is a good way to shop around for the best rate and help you budget for the purchase.

In some cases, accepting a low-rate auto loan on a CPO car comes with another trade-off: The dealer may be less willing to negotiate on the vehicle’s price. A key strategy to get the best deal when negotiating is to focus on the out-the-door price instead of zeroing in only on the financing deal. When deciding between low-rate financing or a reduced vehicle price, an auto loan calculator can help you identify the most advantageous scenario for your budget.

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Cars.com’s Editorial department is your source for automotive news and reviews. In line with Cars.com’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of Cars.com’s advertising, sales and sponsored content departments.

Photo of Jane Ulitskaya
Former News Editor Jane Ulitskaya joined the Cars.com team in 2021, and her areas of focus included researching and reporting on vehicle pricing, inventory and auto finance trends. Email Jane Ulitskaya

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