NADAguides FAQ

NADAguides Frequently Asked Questions

Certified Vehicles (CPO)

What exactly is a Certified Pre-Owned Vehicle (CPO)?

The buzz on the street today is Certified Pre-Owned or CPO. Even though there are many used cars on the road, not every one of them qualifies for certification. Typically, a CPO vehicle is a used car that has gone through a rigorous inspection process and that has an extended warranty beyond the car's existing warranty. Other hallmarks of its excellent condition are age limits, very little wear and tear, no major body damage sustained in its lifetime, no inadequate repairs, and fewer miles than a standard, non-certified used car. The best way to describe a CPO car is one that needs very little reconditioning or was reconditioned to original factory specifications.

As a result of stringent guidelines and strict criteria associated with the CPO qualification process, certified pre-owned vehicles are guaranteed, or certified, by the manufacturer. Keep in mind that the benefit of a manufacturers CPO car is the ability to have it repaired at any authorized service center rather than at the selling dealer's facility.

In addition to manufacturer-based certification programs, there are a variety of beneficial certified pre-owned programs backed by car dealers. However, in this section, when we refer to CPO, we're referring to manufacturer certification programs. For added peace of mind, virtually every certified pre-owned vehicle sold today comes with a comprehensive vehicle history report as back up documentation in addition to comprehensive inspections and warranties.

  1. Difference in CPO programs - length of extended warranty, coverage, inspection, etc. - across manufacturers would make a standardized (or semi-standardized) approach a little disingenuous. It would also be difficult to provide a premium on the loan value because the CPO warranty may or may not be in effect during the time of repossession of the vehicle. CPO does not really add value to the vehicle itself except by adding warranty. This creates another layer of complexity when lending is done on these vehicles since a lender would have to determine the likelihood that the CPO value in of itself during different periods of time.
  2. Certification adds money to the *deal* between buyer and seller, but not necessarily money to the *vehicle* itself. This gets us in that sticky legal area where we might be trying to tell subscribers what the selling price is for a vehicle instead of telling subscribers what the vehicle's value is.
  3. It's difficult to quantify how much CPO brings without being able to separate certified units from non-certified ones. We can do this but it still only provides what the value is to the first consumer. Valuing CPO after 1 year, two years, etc. becomes more complicated.
  4. Our Clean value already shows what a vehicle should bring in clean condition so a CPO value would be a little redundant, coming from us.

For more information visit our CPO Certified Cars Center.
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