Are certified used cars good deals or not for first car buyers?

Many car dealers sell “certified” pre-owned cars. How are these cars different from other used cars? Are they more expensive? Are they worth considering as a first car?

Most major automobile manufacturer’s dealers now offer “certified” used cars. A certified car has been inspected and repaired according to detailed manufacturer specifications before being placed on a dealer’s used car lot. Although manufacturer’s programs vary in details, all are fundamentally the same in concept.

Why is it important? Certified cars can significantly reduce one of the largest worries of used car buyers: that used cars can have hidden problems that cause problems and expensive repairs after the sale. 

Certified used car programs offer buyers less risk and greater peace of mind — for a slightly higher price. These programs have been very successful, which shows that customers like them.

What makes a certified car?

Certified pre-owned cars are usually no more than 3 years old, have low mileage, and are in excellent or “like-new” condition.

Each vehicle is inspected according to a detailed checklist that may contain 150 or more points of inspection, including engine and transmission, lights, airbags, exhaust system, power equipment, safety equipment, fluid levels, suspension, brakes, battery, tires and wheels, trim, windows, doors, paint, engine belts, hoses, alarm system, and more.

Certified used cars are typically offered with warranties, although the type of warranty and coverage can vary by manufacturer. Some simply extend new-car warranties on their certified vehicles. Others have a separate warranty that can range from 3 months to 5 years or more. There may be a mileage limit that generally ends the warranty at 100,000 miles, but could be less, depending on the program. Some certification programs also provide for road-side assistance and vehicle return policies.

What’s the cost of certifed cars?

Dealers like to sell certified cars because it makes customers happy — and because they make a larger profit. Customers like the peace-of-mind that comes with certified cars. For that peace of mind, customers can expect to pay a higher price than for a non-certified car.

How much higher cost? The added cost of certification varies considerably, depending on the dealer, the manufacturer, the program, and the vehicle. Typically, certified vehicles will cost about 5%-10% more than non-certified vehicles.

The amount might be as little as $500 for lower-priced vehicles and $5000 for luxury models.

What you should watch for

Vehicle certification programs are backed by major car manufacturers who provide dealer training, set standards, set policies, and back up warranties. Not all programs are alike, so make sure you understand the details of any program you may be considering. Look for a detailed inspection report, guarantee, and warranty that should come with the car.

Beware of certified cars not backed by a car manufacturer

In addition to manufacturer-supported certified car dealers, there are also independent used-car dealers who offer certified cars. However, be aware that these programs may not be of the same quality and, in some cases, may be out-and-out scams. Therefore, use caution when buying “certified cars” from independent used-car dealers.

Certified used cars can make excellent first cars for teens and other first-time buyers. The slightly higher cost comes with a full inspection and a short manufacturer-backed warranty for greater peace-of-mind.

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