Dealers tout certified used cars as a smart choice, promising new-car protections and quality with a favorable used-car price. Certified used cars are billed as the cream of the crop, inspected and reconditioned according to stringent guidelines. But they can cost hundreds or thousands of dollars more than noncertified vehicles. And in reality, they're not always better than uncertified cars.
Much of the increased cost is due to an included warranty or service contract. Consumer Reports has historically advised against paying extra for separate warranty coverage, often known as an extended warranty.
Actuarial data show that you might be better served saving the cash you’re putting into the premium price of a certified preowned (CPO) car and using it for a rainy day repair on a traditional used car. If the funds go unused, they could be applied as a down payment on your next car, along with your trade-in.
A CPO car with an extended warranty can provide peace of mind, especially if you're choosing a model known for less-than-average reliability. The extended warranty has value to some buyers, but the objective measure is that it will probably mean spending more than necessary on the car.
Not All Certifications Are Created Equal
Even though a used car might be advertised as certified, it could lack the backing of an official automaker certification program. Some dealers certify cars themselves or sell third-party certifications. These types of CPO programs carry certain risks.
For instance, you could be stuck in a paperwork snarl when it comes time to make a warranty claim, especially if you seek work at another facility. You should ask the dealer to provide official documentation so you can review the warranty details before buying. Be aware that not all certifications are transferable from one owner to another.
We recommend that you have any used vehicle—certified or not—inspected by a trusted independent mechanic, preferably one experienced in auto-body work. Expect to pay about $100 for this service, or an hour’s labor. Not all dealers will let you drive a car off the lot without a chaperone salesperson, but a trustworthy dealer should understand your interest in getting an unbiased opinion. The beauty of this approach is that the mechanic works for you without any potential personal gain from the car sale.
Most important, just because a car is certified doesn't necessarily mean it's trouble-free. As we have seen in our past investigations, consumers have taken legal action claiming that certified inspections weren't properly performed or that certified used cars had serious defects, some of which affected vehicle safety. Don’t assume that certification means the vehicle hasn’t been wrecked or flooded, or that it hasn't suffered other serious damage—or even that it has been properly inspected. And a clean history report can't guarantee the vehicle has not been in an accident.
Federal law doesn't require recalls to be performed on used cars—even certified used cars. Be sure to check whether there are any open recalls by entering the vehicle identification number (VIN) at safercar.gov. You can also check at CR.org/carrecalls for guidance. Whether initiated by an automaker or required by the government, recalls are issued to address safety-related defects or problems, and related updates should be done promptly. The work will need to be done at a new-car dealership for that brand.
We think it’s fine to buy a noncertified car and bank any savings. Choose a reliable model, and get your mechanic’s approval. If you do go the CPO route, be sure to read the fine print on any warranty that's offered to determine whether the vehicle has been certified by a manufacturer, dealer, or third party.
Try our online used-car marketplace. Log on to search used-car listings new to you augmented with CR reliability ratings, allowing you to focus on vehicles that are known for their good reliability. Go to: CR.org/usedcarmarketplace.
Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2017 Consumers Union of U.S.