CARS.COM — Certified pre-owned vehicles have set sales records for five consecutive years as more consumers decide that the security of a CPO program offsets the risks of buying a used car compared to buying a new one. If you're considering buying a CPO vehicle instead of new, here are some plusses and minuses:
Pros:
- The best CPO vehicles are like-new cars at a used-car price. They are late-model, low-mileage vehicles that look showroom fresh but can cost thousands less than a new version of the same model, and they come with some level of comprehensive warranty coverage.
- Interest rates generally are higher on loans for used cars than for new ones (much higher for those who don't shop for a loan). Factory-backed CPO programs often include low-rate financing offers that are similar or equal to the deals available on new cars, and lower than what you could get on your own for a non-CPO used car.
- Several CPO programs extend the powertrain warranty up to 100,000 miles, far longer than the original powertrain coverage. Combined with any remaining basic warranty coverage, this might be enough to keep you from feeling that you need to buy an expensive extended service contract.
- The most rapid depreciation occurs in the first three years of a car's life, often on the order of 35 percent to 45 percent of the original selling price. That doesn't mean you'll be able to buy a 3-year-old CPO vehicle for half the cost of a new one. It does mean, however, that someone else absorbed the worst depreciation, and you're getting a bargain by comparison.
- Because used cars are less expensive, you could buy a late-model, top-of-the-line CPO vehicle for less money than an entry-level new vehicle with fewer features.
Cons:
- CPO programs vary, but some include vehicles that are as many as 7 years old with up to 85,000 miles. Though they may have been thoroughly inspected and reconditioned where necessary, they're still secondhand cars that have used up a significant portion of their expected life span, including their prime time.
- Most new vehicles are sold with incentives, such as rebates, free option packages and low-rate financing, which reduce the total purchase price and narrow the difference between buying a new car or a CPO vehicle. Because CPO vehicles have become so popular, some dealers price them almost as high as new cars, so be sure to compare new versus CPO prices.
- It's easy to price shop for a new vehicle when several dealers for the same brand are competing on price to sell the same vehicle. You can compare apples to apples by shopping on the internet, by texting or by phone. With used cars, dealers like to say, "No two used cars are alike." It's often harder to find the same used car with the same mileage and features at competing dealers. That makes it harder to know who is offering a better price.
- With any used car you really don't know how it was driven by the previous owner, whether it was mistreated or neglected, or even if it was involved in a minor accident. A vehicle history report may not show all of that. Buying new means you will know that car better than anyone, including how many potholes it hit, how many times it was waxed and the entire service and repair history. CPO vehicles offer more peace of mind than other used cars, but nothing beats being the first owner.
- A CPO vehicle is used, and so are all the parts, including those that wear out periodically, such as brake pads and rotors, the battery, tires and engine coolant. The chances are slim that all of those "wear" parts were replaced as part of the certification, so you likely will have to replace them sooner than you would on a new vehicle — at your expense.
from Cars.com News http://ift.tt/1VZPnsc
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