It’s a scenario prime for a report on an investigative news show. A person visits a used car dealership and finds the vehicle of their dreams. They think it is perfect for them until they get it off the lot. After a while they are spending so much on repairs they wonder if it would’ve been better to get a completely new car. The answer is not necessarily. What the person should’ve done was investigate the phenomenon of certified pre-owned cars. With the presence of certified pre-owned cars, used car buyers can pretty much get the same type of security associated with purchasing new vehicles.
Though there are similarities in the process in buying these cars to new cars including the services offered by the dealership, the quality and the warranties, these cars are used and are generally financed under the terms of a used car loan. This doesn’t mean that the car financing options are not generous but they are not the same as new car loans. Used car loans, whether they are certified pre-owned cars or not will almost always have a higher interest rate on the car loan.
So, what exactly is a certified pre-owned car? A certified pre-owned car refers to used cars that are offered for sale by the local car dealer with the support of the vehicle’s original manufacturer, with warranties that extend beyond the initial coverage. A certified pre-owned car is a used car that has undergone a professional inspection by a highly trained mechanic, who got his education from the manufacturer associated with the car. Certified pre-owned cars also come with manufacturer based extended warranties. These warranties may also include other services, such as roadside assistance or use of loaner cars when the main car is being repaired.
The length of time that is covered by the extended warranty will depend on the manufacturer. Some manufacturers will offer a six-year extended warranty, which usually translates into 75,000 miles of usage. Others may only offer a warranty of just three months, which is 3,000 miles. A person interested in researching the specific types of extended warranties associated with certified pre-owned cars can get more details by visiting Edmunds.com.
One should be aware that unscrupulous dealers may trick a buyer into thinking that a used car is certified by simply putting a ‘certified’ sticker on it. They will also tell them that the vehicle has gone through the same types of stringent checks that normal certified pre-owned cars go through. Extended warranties may also be offered, further fooling the buyer. Used cars sold with third-party warranties are sometimes advertised as certified pre-owned, but are not factory or manufactured certified because the authority and expertise of the vehicle’s manufacturer do not stand behind the third party warranties. In addition the third party warranty may be misleading term since a third party warranty is technically an extended service contract.
With a true certified pre-owned card since the car is certified, the cost of the inspection and warranty program should be included in the purchase price of the vehicle. Be sure there isn’t a separate charge for an extended warranty or for certification process and inspection.
With that being said, how can a prospective car buyer determine whether a certified pre-owned car is actually certified? Certified vehicles can only be sold by dealerships branded by their manufacturers. For example, a certified pre-owned car that is a Mercedes must be sold by a Mercedes dealership for its certification to be considered official. If it’s sold by an independent dealership, chances are the certification is dealer-based. And in most cases, the car buyer who purchases a certified used car from a specific manufacturer’s dealership gets to enjoy the benefits that the new car buyer benefits from at those dealerships.
To find a certified pre-owned car, a person can visit the dealership directly or go online. If one decides to go online, they can try visiting the website associated with a dealership and/or take a look at car buying sites, such as Car.com. If trying to get the best price is a concern, car buying sites tend to be a better choice for the consumer. Basically, all they have to do is enter in the make and model of the car they’re interested in, and they will be returned a list of all the certified pre-owned makes available in their area.
While buying a certified pre-owned vehicle is similar to buying any used car, there are significant differences you should be aware of before you go shopping. The amount of the warranty and value of the certification as well as the dollar amounts for the cost of the car will clearly vary from brand to brand, so check with your local dealer for the specific details. Many dealerships will have web sites listing their inventories and the certified used cars that they have for sale.
Once it is time to negotiate the price and buy the certified used vehicle, it is time to check into car loan rates in detail. Before talking price and terms with the certified pre-owned dealership, make sure you browse the available car loan rates and terms outside of the dealership. Once you are knowledgeable about the prevailing car loan rates you can negotiate price and see what auto loan rates and terms the dealer may have available or if there are any special concessions you can receive by providing your own car loan financing.
In conclusion, in the world of used car buying, a person will be offered more security if they invest in a certified pre-owned vehicle. The attraction to certified used vehicles is clear — new car benefits at a used car price. Price-wise, certified pre-owned cars are generally more expensive than other used cars. In some cases a certified pre-owned car may mean that the car buyer will have to pay a few thousand more, but in the long run the investment may well be worth it. For those who are cost conscious, and who isn’t, be sure to review the blue book value and check the car loan rates and prices in the auto loan calculator to see just how affordable one of these cars may be.
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