It is a terrific ego boost to get a new car. Everything is so bright, so shiny, so untouched. Even though you’d never wear “new-car smell” as a cologne, there is something enticing about it. But these days, with the prices of new cars escalating into the stratosphere, some car-buyers are taking a second look at buying a new car, instead choosing to buy a car that is “new to them.” In other words a used car.
A decade ago buying a used car would likely have struck fear into most car-buyers’ hearts. “What if I get a lemon?” they cried. “When I buy a used car aren’t I ‘buying someone else’s troubles?'” But attitudes, like hair styles, continue to change, and one of the things that has shifted the image of used car from “money pit” to “where the smart money goes” is the concept of the certified pre-owned car. Now that the concept has been around for a while, many consumers are coming to the conclusion that buying a used-car is a pretty wise expenditure…as long as it comes with the peace of mind typically associated with a new-car purchase.
That is just what you get with a certified pre-owned (CPO) vehicle. When certified by the brand that built it — and that’s important — a CPO car will offer significant warranty protection and perhaps other perks like a new-car loan interest rate, roadside assistance coverage and maybe even free maintenance for a year or more. Car manufacturers offer these enticements to consumers because it is in their best interest to keep their brand’s used-vehicle prices high. Doing so positively affects the car’s “residual value,” and that, in turn, helps the manufacturer sell more cars. Further a robust CPO business means better profitability for each brand’s dealers, which aids the manufacturer in a number of ways.
Cars are lasting longer than ever
In this case, the needs of the manufacturer and the needs of the car buyer align perfectly. While the manufacturer desires to build value into its used vehicles, the consumer is offered a variety of benefits to make the purchase more appealing. That appeal is boosted by two trends. 1. Cars are lasting longer than ever, so a two- or three-year-old vehicle still has many, many thousands of miles of useful life ahead of it. 2. Substantial appearance changes from one model year to the next are largely a thing of the past. Nowadays a three-year-old car can look virtually identical to its brand-new counterpart from the current model year. Typically, individual models go through a major change every five or six years, so with a little research you can buy a three-year-old car that will be a dead ringer for a brand new version of the same model. If you don’t tell, we won’t.
By buying a CPO car you can be the beneficiary of several years of depreciation versus the victim of it. You can purchase a vehicle with more amenities than you might have been otherwise able to afford. That car will have tens of thousands of useful miles in its future. And you’ll enjoy warranty coverage that equals — or even outdoes — the same model’s new-car warranty. No wonder the smart money is now gravitating to CPO cars.