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Car Buying Advice, Tips, and Reviews

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Factory Certified Pre-Owned vs Dealer Certified Pre-Owned

When checking used car ads from dealerships, certain phrases frequently pop up. “Certified Pre-Owned” is one of the most common phrases, and just looking at that phrase gives car shoppers a sense of security. Whether the description says the vehicle is “Factory Certified” or “Dealer Certified,” it is a comforting phrase. It gives the impression that someone has fully inspected the vehicle, and that all of the possible issues have been discovered, noted, and corrected. “Certified” leads the shopper to believe that someone is standing behind this vehicle. In today’s car market, though, the word “certified” can be thrown around by any entity, and in each case, the word means something different. Being a savvy consumer has gotten a little more difficult because it’s critical to take a second or third look at the vehicle advertised to see who is doing the certifying, what that inspection actually takes into consideration, and what warranties or bonuses are associated with that specific certification. It turns out that the word itself may not mean the same thing to every vehicle, and knowing the difference can make or break a good deal on a used vehicle. In this article, each type of certification will be discussed to help used car shoppers around the country know what to look for, and what it means to have a Factory Certified Pre-Owned vs Dealer Certified Pre-Owned vehicle.

The Factory Certified Pre-Owned Vehicle

Each vehicle manufacturer has their own qualifications for what they will consider for a Factory Certified Pre-Owned car, truck, or SUV. In most cases, the vehicle will be less than seven years old, with fewer than 80,000 miles.

Each of these vehicles is subjected to a multi-point inspection by the dealership, the results of which are provided to the manufacturer, who then must sign off on the information provided to confirm the vehicle is, in fact, Factory Certified. The dealer is responsible for reconditioning the vehicle as needed to correct any glitches or problems encountered in the inspection. A fee is paid by the dealership to register the vehicle as Certified Pre-Owned with the manufacturer, and the paperwork associated with this process should be available for review.

As a result, certain benefits are passed down to the prospective buyer of the CPO vehicle. Typically, these vehicles are eligible for extended warranties and may have additional benefits, like roadside assistance, loaner vehicles during the warranty period, and free trials of add-on services, like satellite radio or navigation programs. These bonuses make Factory CPO vehicles all the more tantalizing to buyers, and while these vehicles are typically priced higher than standard used vehicles to accommodate for the extras, consumers are willing to pay for the peace of mind.

When considering a used vehicle, a smart shopper should always consult the details of how each manufacturer’s CPO warranty works, and what features and functions are included in the inspection. These details can be found on each auto company’s website. When researching a new car, take the time to read all of the points on the manufacturer’s requirements for a vehicle to be factory certified, and keep that in mind when shopping. While a truly CPO vehicle will have undergone strenuous testing, there are a few sellers who may be less than honest. A little extra research can save a lot of headache.

There are two other facts to bear in mind when searching for a Factory Certified Pre-Owned Vehicle. First, know that the vehicle will be listed by brand, such as “GM Certified Pre-Owned” or “Honda Certified Pre-Owned.” Factory CPO vehicles can only be sold by dealerships affiliated with that manufacturer, so an Infiniti Certified Pre-Owned vehicle could not be found on a Toyota lot. Next, these vehicles will feature a manufacturer’s sticker with their specific CPO logo on it. Typically, these stickers will be found on the window sticker of the used car itself.

Dealership Certified Pre-Owned Vehicles

A customer is signing warranty papers, which is something that you should look for when looking at Factory Certified Pre-Owned vs Dealer Certified Pre Owned, at a used car dealership.

Some critics feel that a dealership certification is meaningless in the car market, but that simply isn’t true in all cases. If a vehicle is too old or has too many miles to qualify for the factory certification, a dealership may put the vehicle through its own rigorous inspection process. The staff of the dealership will review the vehicle inside and out, making note of imperfections and reconditioning the car as needed, just as in the factory inspection. The difference is that dealerships are not able to offer the same manufacturer extended warranty and bonuses on these vehicles. They may, however, offer third-party warranties.

As a consumer, it is important to review the details of these warranties. While they do offer protection in the event of failures or mishaps for systems and parts, they may have specific requirements. For example, the warranty may require that the car is only serviced at the dealership or a particular group of repair shops. The warranty may not cover the same systems – for example, factory-installed safety features may not be covered as robustly as the manufacturer’s warranty would.

On the plus side, dealership Certified Pre-Owned vehicles are generally less expensive than factory Certified Pre-Owned vehicles. Partly, because the dealership does not have to pay the fees to the manufacturer for the certification, passing the savings on to the buyer.

Other Types of Certification

Sometimes, a vehicle may simply be proclaimed as “Certified Pre-Owned.” There are other types of certifications available for pre-owned vehicles. A Carmax Certified used vehicle has received none of the inspections mentioned; however, a review of its history reveals it has a clean title and has never been in an accident. A NIADA Certified used car has been inspected under the requirements of the National Independent Auto Dealers Association. The benefits of this program aren’t too different from that of the manufacturer’s certification, as the vehicle has been fully inspected and reconditioned, and will offer a limited warranty and potential benefits, such as roadside assistance. These vehicles may be older than the typical factory Certified Pre-Owned vehicle or have higher mileage, but the perks of the certification are similar to that of the factory process.

While the word “Certified” tends to bring a sense of security to the average shopper, it’s important to do the research to determine what is being certified, and by whom. Each type of certification will include a warranty, but the terms of that warranty will differ, depending on its source. If the ad in question does not specify where the certification comes from, feel free to ask questions. Become familiar with what is covered in the factory certification process, and review the benefits of the warranty. Remember, a dealership can only sell factory Certified Pre-Owned vehicles of its associated brands, while any dealership can consider any vehicle a dealership CPO vehicle. Always take the opportunity to inspect the car, truck, or SUV yourself, as this may uncover some blemishes that may have been overlooked in a non-factory required certification process. With knowledge comes power, and informed consumers are far more likely to make better purchasing decisions!