Should I Buy a 'Certified' Used Car?

The simple answer is “maybe”.  But read on and don’t take uncertified used cars off of your buyer radar just yet.  “Certified used car” programs emerged in the 90's as a way to provide shoppers with an alternative to the traditional choices of buying either “new” or “used”. This third option, coined “certified pre-owned,” was designed to provide new car peace of a mind at a used car price.

The concept gained prominence as leasing programs hit all-time highs in the late 90's, leaving dealerships with a surplus of late model, low mileage off-lease cars in good condition.  Rather then send the cars off to auction, dealers began reconditioning them and selling them as “certified” often with a warranty from the dealership.  Luxury manufacturers such as Lexus and Mercedes were quick to see the value of such programs and soon created their own factory certified programs that included a factory-backed warranty.  Soon, nearly every manufacturer had their own program and the “certified used car” became a viable option for buyers looking for something less than new but more than used. 

Today, “certified used cars” represent a significant portion of all automotive sales. In recent years, about 10% of all sales were attributed to certified vehicles and nearly 40% of late-model used-car buyers invested in a “certified used car”.

The typical manufacturer-certified used car undergoes at least a 100-point inspection and includes either the remainder of the original factory warranty or a manufacturer-backed warranty that extends the typical original 3-year/60,000-kilometre policy up to 7-years/180,000 kilometres.

Dealer-certified used cars also undergo an inspection and are generally sold with a dealership-backed warranty. Some dealer-certified used cars may include only a 90-day warranty or, in some cases, no warranty at all.  In that case, the buyer can choose to invest in an extended service contract through the dealer or with an aftermarket provider.

Program details vary depending on who is certifying the car.  Factory-backed programs are generally better than programs dealers offer on their own if for no other reason than you can have repairs completed at any of the manufacturer’s dealerships, not just the dealership where you bought your used car.  There’s also the confidence factor of knowing you’re dealing with the factory, not an individual dealership that may not be around when it comes time to honor a warranty repair.  Although manufacturers’ are experiencing their own financial woes right now, the national government has clearly Stated they will back factory warranties.  Lastly, terms of dealer-backed certified programs can vary greatly from dealership to dealership so if you’re considering buying a used car under one of these programs, be sure you understand exactly what the vehicle inspection covered and what reconditioning was completed.  Also, read the fine print on the warranty to know what is covered and what isn’t and what your responsibilities are in terms of preventative maintenance.  While most powertrain components may be covered, often ‘wear and tear’ items like brakes, belts and shock absorbers are not.   It’s relatively easy to get details of factory certified programs on each manufacturer’s website,  but each dealer’s program must be researched individually by either visiting the dealership or its website.  Whether you go with a factory-backed or a dealer-backed program, proponents of the certified programs say buyers purchasing certified used vehicles enjoy a peace of mind that can only be matched by new car buyers.

So it’s a no-brainer, right?  Purchase a perfectly good certified used car with low mileage, high reliability and a warranty to boot. Well, maybe not.  Unfortunately, factory and dealer-certified used cars are marked up to “premium” prices after receiving their “certified” designation.  Dealers often add new-car perks such as roadside assistance and free oil changes, but rarely do they justify the higher prices for these vehicles. Whether it’s the manufacturer or the dealership offering the certification, you can bet buyers are paying a significant premium for their peace of mind.

Also keep in mind that no federal or State agency monitors “certified used car” programs, so manufacturers and dealers have a lot of leeway in deciding what minimum requirements vehicles must meet to be considered “certified”.  Without hard and fast rules about what it takes to be “certified”, some used cars with that designation may be in no better condition than those you might find in the private seller’s market.

Of course, if you’re purchasing a used car from a private party you don’t have the “certified” option.  However, smart buyers do have other options.  First and foremost, if you’re buying a used car from a private party or an uncertified car from a dealership, you will want to get all of the information you can about your potential purchase.  That means having a professional inspector go to the dealership or the owner’s home or work and thoroughly inspect the vehicle and give it a careful test drive.  It also means ordering a car history report on the vehicle from companies such as Once you have the completed vehicle inspection report and the vehicle history report, you’ll be ready to make your final purchase decision.

Car Inspector's 400-point vehicle inspection administered by a highly trained professional can provide the buyer with the same confidence they would get from purchasing a certified car, but at a significantly lower price.  Car Inspector allows the buyer to expand on their options by entering the realm of private sellers and other uncertified cars. Of course, the other valued component of a certified car is the factory-warranty. No problem. Much of the protection provided by factory warranties can be found in extended service contracts from aftermarket providers.  Just be sure to carefully read the fine print so you know exactly what the contract covers. This option is often pursued by buyers who purchase dealer-certified cars that are not equipped with warranties. The combination of an Car Inspector inspection, vehicle history report and an extended service warranty can provide any potential buyer with “certified” reliability and peace of mind at an “uncertified” price.

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