How to Compare CPO Programs

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CARS.COM — You shouldn’t judge a book solely by its cover, and neither should you judge a certified pre-owned program only by its brochure. CPO programs vary widely in their warranty coverage, including whether vehicles can be exchanged. Here are key provisions to compare:

Inspection points: The number of items that are supposed to be inspected by a dealer before a vehicle is “certified” varies from as few as 112 (Volkswagen) to as many as 300-plus (Audi). Some manufacturers don’t list a specific number and instead say the inspection is “comprehensive” or “rigorous.”

The number can be misleading because some CPO programs may lump brake pads and rotors into one inspection point and others may list them separately. Whatever the number, the dealer is supposed to check not only vital parts such as the engine, transmission, suspension and brakes but to repair and replace as needed.

Bear in mind that a part doesn’t have to be new to pass an inspection. Brake pads and rotors, for example, might pass a CPO inspection if they still have at least half of their useful thickness.

Finance rates: The lowest interest rates on car loans are on new vehicles, but loans on CPO vehicles are often available at lower rates than other used cars, and sometimes are even zero percent. The manufacturers help promote CPO sales by dangling interest rates that are close to those offered on new vehicles and, in some cases, that are the same.

Lower interest rates make a difference. For example, the interest on a $20,000, four-year used-car loan at 4 percent would be $1,676. If a four-year loan on a CPO vehicle was available at 2.9 percent, the buyer would save $470 in interest. At 1.9 percent, the buyer would save nearly $900.

These low-rate loans are offered by the captive finance units of the manufacturers (such as Ford Credit and Toyota Financial Services), and not all buyers will qualify. In addition, the lowest rates might only be for loans of 36 months or less.

Warranty terms: The remaining time and mileage from the original basic and/or powertrain warranties transfer to the buyer of a CPO vehicle, but with few exceptions neither the original nor CPO warranties cover maintenance items such as tires, brake linings, air filters and other “wear” parts.

CPO programs typically also extend the basic warranty or the powertrain warranty, and many programs extend both, but the terms vary by brand, so this is a key component that shoppers should be clear on before they buy. You can compare CPO warranties here.

Acura, Buick, Chevrolet, Ford, GMC, Honda and Mazda are among those that extend the basic warranty by 12 months/12,000 miles. Acura, Ford, Honda and Mazda extend the powertrain warranties on CPO vehicles, but Buick, Chevrolet and GMC don’t. On vehicles from Fiat Chrysler Automobiles (including Chrysler, Dodge, Fiat, Jeep and Ram), the basic CPO warranty is for three months/3,000 miles. Nissan doesn’t extend the original basic warranty on its CPO vehicles, only the powertrain warranty.

Deductibles: More than one-third of CPO programs have a per-visit deductible for warranty repairs. None is higher than $100, but it pays to ask ahead of time to avoid unpleasant surprises after the fact. Among those that do, BMW, Hyundai, Nissan and Toyota charge $50 per visit; Audi charges $85; and FCA, Ford and Lincoln charge $100.

Options to return a vehicle: In most cases, CPO vehicles cannot be returned for a refund or exchange. However, Acura, Buick, Chevrolet and GMC allow exchanges within the first three days, and Mercedes-Benz and Smart have a seven-day/500-mile exchange policy. With other brands, dealers may agree to an exchange on a case-by-case basis, but most times once you buy it, it’s yours.

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