by Mike Kilgore

Created on: October 08, 2009   Last Updated: October 12, 2009

Factory certified used vehicles are appearing on dealer lots all over the country, but what exactly are they? Each manufacturer has established a certified pre-owned (CPO) program for the resale of their brand of vehicles. The advertised purpose of these programs is to offer the new car buying experience to the used car buyer. While standards vary between brands, each vehicle that bears the CPO label must meet certain required mileage and age limits, cosmetic appearance, be current on required maintenance and be in good mechanical condition. Wearable items like brake linings and tires usually have to have a minimum of half their original wear left. All options must be operational and up to original equipment specifications. Most require some type of vehicle background check such as a Carfax report.

The advantage to the buyer is threefold. First, the certified check required by the factory is much more stringent than a standard used car safety check. Secondly, the manufacturer generally offers an extension of the limited new car warranty that is accepted at any dealership. Third, manufacturers often offer buying incentives, usually in the form of special or reduced rate financing on the purchase of their CPO inventory.

The only major disadvantage to buying CPO is that they generally retail for $800 to $1,200 more than a comparable car due to the expense the dealership has in bringing the car up to the manufacturer's standards. There is also a fee paid by the dealership to list the vehicle as certified which can range from $250 to $500 or more. You will find that a CPO vehicle will show a higher value on car valuation websites like Kelly Bluebook (www.kbb.com) than similar vehicles that due not have the CPO label.

One of the most important things to check before buying CPO is the reputation of the dealer that is offering it for sale. While the factory has established the standards and stands behind the vehicle, it is the dealer that performs the inspection and ultimately declares that it is eligible for certification. Factory representatives periodically audit the dealership's practices but don't inspect every vehicle. Use the same level of care making this purchase as you would any other.

CPO standards do vary between manufacturers. Visit their individual websites for details on standards, warranty extension and any special offers or incentives. You can also access a list of available CPO vehicles in your area. If you shop for one, do your research well and negotiate favorable pricing and terms with the dealership and you too can own a like new vehicle at a used car price!

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