If you’re in the market for a used vehicle to keep costs low, you may have come across the term “Certified Pre-Owned (CPO)”. But what exactly does this mean? How does a CPO differ from a regular used car? Understanding what makes a vehicle certified can help you make a more informed decision when buying a vehicle, especially given the high cost of such a purchase.
Key Points
- A certified pre-owned vehicle is a used car that has gone through a multi-point inspection and comes with extended warranties and additional perks that provide assurances of their quality.
- While CPO vehicles may be slightly more expensive than regular used cars, they’re typically more affordable than new cars while still featuring some of the benefits that new vehicles come with.
- CPO vehicles are not as readily available as regular used cars, which makes them more difficult to find depending on the dealership.
What Are Certified Pre-Owned Cars?
A CPO vehicle is a used car that’s been thoroughly inspected by a professional, refurbished, and certified by the manufacturer or car dealership. These vehicles meet specific quality standards before they are deemed “certified” and sold to a buyer.
CPO vehicles come with added advantages over regular used cars in that they may come with extended warranties, roadside assistance, and have had a comprehensive inspection done.
CPO vehicles typically have low mileage, are gently used, and have been well-maintained. They can be a great alternative to new cars thanks to their lower price points and higher reliability than a regular used car.
Best Certified Pre-Owned Programs In Canada
Some of the best CPO programs in Canada come from the following popular car brands:
| Brand | CPO Program Details |
| Toyota | – 6-month / 10,000 km Powertrain & Roadside Assistance Coverage – Complimentary First Oil & Filter Change** – Zero Deductible- Extensive Mechanical & Appearance Reconditioning – 7 days / 1,500 kms Exchange Privilege* |
| Honda | – 7-day / 1,000 km exchange privilege (whichever occurs first) – Multipoint mechanical and appearance inspection – Powertrain Warranty for 7 years or 160,000 km (whichever comes first) – A CARFAX Canada Vehicle History Report (VHR) – Access to My Garage |
| Volvo | – 170+ point inspection- complementary 1-year subscription to Volvo Cars App – 24/7 Roadside assistance – Detailed history report from CarFax Canada – Comprehensive warranty of at least 1 year and unlimited km of coverage |
| Nissan | – 72 months / 120,000 kms limited powertrain warranty – Roadside assistance – 169-Point Inspection – 1-year no-charge oil change – Security-Plus Platinum Protection |
| BMW | – 1-year warranty coverage – CARFAX Vehicle History Report – 24/7 roadside assistance – Thorough multi-point inspection – Exclusive financing offers |
What’s The Difference Between A Used Car And A CPO Vehicle?
There are key differences between a regular used car and a CPO vehicle that car buyers should understand:
| CPO Vehicles | Used Vehicles | |
| Age | Usually under 5 – 7 years old | May be older than CPO cars |
| Mileage | Typically low mileage | May have varying levels of mileage |
| Condition | Must meet specific manufacturer’s standards | Condition varies based on previous owner’s care and maintenance |
| Inspection | Multi-point inspection conducted | No inspection required |
| Warranty | Warranty from manufacturer or dealer is often included | No warranty |
| Roadside Assistance | Often included | Not included |
Who Certifies The Vehicle?
A vehicle may be certified from two sources:
- Dealerships: Vehicles certified by dealerships go through an in-depth inspection and refurbishment process to meet specific standards set by the dealership.
- Manufacturers: Vehicles certified by manufacturers go through a comprehensive inspection and refurbishment process to meet strict manufacturer standards.
Vehicles that are certified by dealerships or manufacturers both come with added benefits, such as extended warranties, roadside assistance, and vehicle history reports.
Note: CARFAX Canada is a trusted provider of vehicle history reports. A free CARFAX Canada report through a CPO program provides you with immediate access to the vehicle’s history, including past accidents, odometer readings, title information, and registration details.
How Does A Vehicle Become CPO?
CPO vehicles are highly sought after thanks to their lower price compared to new cars and their enhanced condition and assurance as a result of comprehensive inspection and refurbishment.
When a dealership gets a used car, the vehicle is put through an inspection process by a qualified mechanic. If the vehicle meets specific dealership or manufacturer standards, it then goes through a refurbishment process, then is marketed and sold as a CPO vehicle.
What’s Included in A CPO Inspection?
When looking into a CPO program, be sure to consider the following:
- Warranty Coverage: Make sure the CPO vehicle comes with a comprehensive warranty that extends beyond the original factory warranty covering at least the powertrain.
- Inspection Process: Look for a program that involves a comprehensive multi-point inspection to verify the condition of the vehicle.
- Vehicle History Report: A detailed history report should be provided, showing the vehicle’s past ownership, accident history, and maintenance records.
- Eligibility Requirements: Make sure the CPO vehicle you’re looking at is eligible for the CPO program. For instance, check the age and mileage limits.
- Additional Benefits: Some CPO programs may include other benefits, like roadside assistance and complimentary maintenance.
Certified Warranty Vs Extended Warranty
Both certified and extended warranties can extend beyond the original factory warranty. However, there are slight differences between the two.
- Certified Warranty: A certified warranty is an updated version of the standard warranty that factory-backed certified pre-owned vehicles come with.
- Extended Warranty: An extended warranty can be purchased as an add-on for just about any vehicle sold at a dealership. They’re available from carmakers and third-party warranty vendors.
Learn more: Should You Buy an Extended Warranty For a New or Used Vehicle?
Benefits Of Buying A CPO Vehicle
There are plenty of perks that come with purchasing a CPO vehicle:
- Lower Price Than New Cars. Since the vehicle is used, it will be priced lower than a brand new car of the same model. This saves you money and helps you avoid rapid depreciation that is common over the first few years with new vehicles.
- Extended Warranty. CPO vehicles typically come with extended warranties that cover major components and repairs, which can save you money if the vehicle experiences an issue shortly after you buy it.
- Roadside Assistance. Many CPO cars feature roadside assistance for things like towing, flat tires, lock services, and battery jump starts.
- Peace Of Mind. Unlike a regular used car, you can rest assured that the CPO vehicle has undergone a rigorous inspection to ensure it meets the manufacturer’s standards.
- Lower Financing Rates. Compared to regular used cars, interest rates to finance a CPO vehicle are often lower, saving you money on a car loan.
Drawbacks Of Buying A CPO Vehicle
While purchasing a CPO vehicle can provide you with certain assurances that regular used vehicles don’t, there are some downsides to consider:
- Higher Price Than Used Cars. While lower than new car prices, CPO vehicles are usually more expensive than a used car that hasn’t undergone the inspection and certification process. That said, you’re getting several additional features with a CPO vehicle, which may account for the higher price.
- Still Used. Despite their certification, CPO vehicles are still considered used cars. They’ve been owned and driven for a certain amount of time before you take possession, so the car may still have some level of wear and tear.
- Limited Availability. CPO vehicles are typically harder to find than used cars because not all qualify for CPO programs. These are also only found at dealerships, meaning you cannot buy a CPO vehicle from a private third-party seller.
Can You Finance A CPO Vehicle?
Yes, you can finance a CPO vehicle just like you would with any other new or used car. Many lenders, such as banks, credit unions, alternative lenders, and dealerships, offer competitive financing options for these types of vehicles. If you’re patient, you may even be able to snag a promotional rate.
In fact, because CPO vehicles have a higher resale value than regular used cars, lenders tend to charge lower interest rates on financing. That means you may be able to snag a lower rate to finance the purchase of a vehicle, thereby making financing more affordable.
Before applying for CPO vehicle financing, consider the following:
Check Your Credit Score
If you’re considering taking out a loan to finance a car (which is typically the case for most consumers), it’s a good idea to check your credit score before you apply. While not all lenders will use your credit score as a determining factor, having good credit will certainly increase your chances.
You can quickly check your credit score for free using Loans Canada’s CompareHub.
Pay Off Any Other Debts
Before applying for a loan, it’s best to pay off any debts as much as possible. This will free up your income to put towards a car loan and can increase your chances of loan approval at a favourable rate.
Compare Lenders
Use an online loan comparison resource like Loans Canada to find and compare lenders and their loan products. Pay special attention to interest rates and loan terms to find the best loan that suits your needs. A great way to compare offers is to get pre-approved.
Gather All Relevant Documentation
Get any relevant financial/personal documentation ready before applying for a car loan to ensure the loan application process runs as smoothly and quickly as possible. Documents you may need to apply for auto financing include the following:
- Proof of identity (driver’s license, passport)
- Proof of residency (utility bill, lease agreement)
- Proof of income (pay stubs, tax receipts)
- Proof of employment (employment letter)
- Proof of vehicle ownership
Is A CPO Vehicle Right For You?
A CPO vehicle is a great option for buyers who want a lower price tag, reliability, warranty protection, and lower financing rates. However, a regular used car may still be the cheaper way to go.
| Consider A CPO Vehicle If … | Consider A Regular Used Car If … |
| You want a lower price but don’t want to spend as much on a new car. | You want to pay the lowest price possible on a car. |
| You want an extended warranty. | You don’t mind not having a warranty. |
| You want a car in good condition with low mileage. | You’re comfortable buying a car that has not been thoroughly inspected. |
| You want lower financing rates. | You want more selection. |
| You don’t mind purchasing from a dealership. | If you prefer a private third-party sale. |
Final Thoughts
A CPO vehicle offers the perfect combination of value, quality, and affordability compared to regular used cars or new vehicles. With comprehensive inspections, extended warranties, and other added perks, CPO cars can provide you with a reliable set of wheels without the high price of a new vehicle.
