Issue Date: February 24, 2008

Buying a certified pre-owned car

You can get a smart deal on wheels by following these guidelines.

By Andrea King Collier

Some 1.7 million certified pre-owned vehicles were sold by manufacturers in 2007, up 2% from 2006, according to Kelley Blue Book. "Pre-owned" is just another name for a used car, but a certified pre-owned vehicle has had a detailed inspection and comes with an extended warranty.

"There are lots of advantages to going certified, especially for a person who wants to buy a more luxurious vehicle at a used-car price," says Ken Gillespie, dealer-partner at Okemos Auto Collection in Okemos, Mich. Also, while extended warranties can be bought separately for any used vehicle, the warranty coverage for a certified pre-owned car is included in the purchase price.

"Most manufacturers limit certification up to five years from the original in-service date of the car [the date when the vehicle was purchased by the original owner]," Gillespie says. "The five-year-old limit only applies to certified vehicles." You can, of course, buy a good used car older than five years, he adds, but it won't come with the same warranties.

Some additional considerations:

Weigh the costs. The savings can be several thousand dollars less than the cost of a new car. However, expect to pay relatively more for a used car that's been certified. "Inspections, repairs and extended warranties can raise the cost anywhere between $300 and $3,200 over the sticker price of an uncertified used vehicle of the same year, make and model," says Jack Nerad of "Kelley Blue Book."

Understand what each dealer's program means. "Not all certified vehicle programs are the same," says James Bell, publisher of IntelliChoice.com, an auto research website that also rates pre-owned vehicle programs. "The inspection process and the warranty can vary from manufacturer to manufacturer." Some programs require a complete vehicle history report and title search. Read the specifics of the certification process for the make of car you want to buy.

Check the limits of the warranty. "Most certified pre-owned vehicles already come with the remainder of their factory warranty, plus a predetermined extended warranty, usually 50,000 miles," Bell says. The warranty on luxury vehicles might extend to 100,000 miles. Some certification programs also offer extra perks, such as free oil changes for the life of the warranty, notes Gillespie, who sells high-end vehicles (Mercedes, BMW, Porsche).