Q: What is a CPO?

December 17, 2013 12:53 PM

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A CPO is a certified pre-owned car. Certified pre-owned cars are typically late-model vehicles. The difference between a CPO and a standard used car is that a CPO has typically been inspected, refurbished and certified, usually by the dealer. A certified pre-owned car also usually includes an extended car warranty and other benefits. Mercedes-Benz and Lexus were the first car manufacturers to offer CPO programs. Most of the vehicles that were introduced in the 1990s as certified pre-owned vehicles were cars that were being traded in for a newer model or were coming off a lease program. Today, many car manufacturers offer CPO vehicles.

A manufacturer-certified pre-owned vehicle is only sold at an authorized car dealer that specializes in that particular brand. Generally, factory CPO vehicles are no more than five years old and have less than 80,000 miles. There are also independent certification programs that offer an alternative to car manufacturer-certified pre-owned vehicles. A certified pre-owned vehicle sold at a dealership will usually come with an extended service contract or warranty that provides you with some level of protection. A CPO will usually cost more than a car certified under an independent program or a used car that is not certified.

Certified pre-owned vehicles offer manufacturers the ability to maximize revenue from cars that have already been sold once. A CPO program can also help to create brand loyalty. Certified pre-owned vehicles can come from a variety of sources, including trade-ins, lease programs and vehicle auctions. A certified pre-owned vehicle can also provide you with a number of benefits. In many instances, financing for a CPO may be less expensive. A certified pre-owned vehicle will also often be in better condition, and the generous warranties offered by the manufacturer or dealer can provide you with greater peace of mind.

There are no regulations regarding the definition of certified pre-owned vehicle. New vehicle warranties are regulated by federal law, while warranties offered on used cars fall under the jurisdiction of state law. If you are considering the purchase of a certified pre-owned vehicle, you may wish to determine who performed the inspection and find out about the reconditioning repairs that were performed. You may also wish to ask specific questions about the length of the extended warranty or service contract and precisely what is and is not covered.

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