If you’re interested in saving money and maximizing your financial investment, it makes sense to choose a used car over one that’s new. Depreciation eats into the value of your car the minute you drive it off the lot, and the effects can be brutal; new cars typically lose up to 19 percent of their value to depreciation in the first year of ownership. If you purchase a used model, depreciation works in your favor by making prices much more affordable.
Of course, there are some drawbacks that come with purchasing a used vehicle. Although used cars are more favorably priced, buyers will have to budget a bit more money for things like maintenance and repairs.
A certified pre-owned vehicle may offer the solution you need. Also known as CPO vehicles, certified pre-owned models are used cars that have been thoroughly inspected, vetted and refurbished. They are sold by dealers, and they come with warranty benefits and financing deals that are similar to those seen in the new-car market.
If you want to save money but are uncomfortable with the element of risk involved in the typical used-car purchase, going the certified pre-owned route makes sense. Here are a couple of tips to keep in mind when choosing one of these vehicles.
Choose a certified pre-owned car that’s backed by the manufacturer. The best certified pre-owned programs are backed by the automaker. Manufacturer-backed certified pre-owned programs are rigid and exacting, and this tilts the scales in your favor. For example, Hyundai subjects all vehicles in its program to a comprehensive 150-point inspection. This inspection covers everything from the vehicle’s stereo to its mechanicals, and it also ensures that all open recalls have been addressed.
If a vehicle has passed the tests manufacturers administer to their certified pre-owned fleets, it stands a good chance of being able to provide you with the quality and dependability you seek.
Compare warranties. Happily, certified pre-owned cars come with warranties that are similar to those offered by new models. This is a good thing, since it can help defray expenses brought by maintenance and repairs.
However, some warranty programs are a bit more ambitious than others. Generally speaking, the automakers with the best new-car warranties are also those offering the best warranty coverage on certified pre-owned models.
For example, Honda provides warranty protection that covers the powertrain for seven years or 100,000 miles, with coverage of non-powertain parts that extends for 12 months or 20,000 miles beyond the expiration date of the model’s new-car warranty.
Pick a car with enough warranty coverage to give you peace of mind over the long haul.
Evaluate benefits. Certified pre-owned cars offer more than just warranty coverage. Many come with a cornucopia of additional benefits that can help make your time behind the wheel less stressful.
Some programs offer emergency towing that will come to your aid if you suffer a breakdown or an accident. Others provide out-of-fuel assistance, lock-out assistance and battery jump-starts. The list of benefits may also include car-rental reimbursement. Trip interruption reimbursement may also be provided, and this awards you a daily payout to cover food and lodging if a breakdown occurs while you’re on a road trip that has taken you more than 100 miles or so from your home.
Scrutinize interest rates. Automakers sometimes offer sweet financing deals on new cars that can reduce interest rates, and the certified pre-owned market offers similarly compelling bargains.
Deals can vary significantly from manufacturer to manufacturer, so if you’re financing your purchase, take the time to examine all available options to make sure you lock down a car with a satisfying interest rate.
A Broader Range of Choices
Since certified pre-owned cars are much more affordable than comparable new cars, you may find that certain models that were not accessible to you on the new-car market are now within easy reach.
If you’d been itching to step up to a luxury model, for example, buying a certified pre-owned car could make this upward move a reality.
By purchasing a certified pre-owned model, you can open yourself up to a whole new world of automotive opportunities.