What Is a Certified Pre-Owned Car?

By the Mercury Team

Whenever you’re car shopping, you might think there are only new and used cars. But there’s another option that offers a perfect middle ground: certified pre-owned (CPO) vehicles. In this guide, we’ll explain exactly what certified pre-owned cars are, how they differ from regular used vehicles, and why they can be a smart choice for your new ride.

Certified Pre-Owned vs. Used: What’s the Difference?

A certified pre-owned vehicle (CPO) is a used car that has been inspected, refurbished, and certified by the manufacturer or an authorized dealer. CPO cars usually:

• Are less than five to six years old (age limits vary by manufacturer).
• Have lower mileage often, under 60,000–80,000 miles (some programs may allow up to 100,000 miles).
• Undergo a multi-point inspection (typically 100+ items) covering mechanical, electrical, and cosmetic components.
• Include manufacturer-backed extended warranties - on top of whatever new car warranty remains - and perks like roadside assistance or free maintenance for a limited time.
• Must meet strict criteria for age and condition set by the automaker.

On the other hand, a used car is any pre-owned vehicle sold without a manufacturer-backed inspection or certification. Used cars:

• Can vary widely in age, mileage, and condition.
• Are typically sold by private sellers or independent dealerships and rarely include manufacturer warranties (unless purchased separately).
• May come with or without service or maintenance records.
• Rely on buyers to do their own due diligence, like ordering a vehicle history report and arranging an independent inspection.

Benefits of Buying a CPO Vehicle

Here’s what you can expect when you choose a CPO vehicle over buying a new or regular used car:

Extended Warranty

Most CPO programs include a manufacturer-backed extended warranty that goes beyond the original new-car warranty. This often covers major components like the engine and transmission for several years or tens of thousands of miles beyond what’s left on the factory warranty. That extra protection brings serious peace of mind, especially if you plan on keeping your car for several years.

Lower Price Compared to New

A CPO car typically costs thousands less than a brand-new model, even if it’s only a year or two old. Because new cars lose a lot of their value the moment they’re driven off the lot, CPO cars let you skip that initial depreciation hit while still enjoying modern features, safety tech, and updated styling.

Dealer Perks

CPO programs can come with bonus perks you won’t get when buying a traditional used car. These can include roadside assistance for emergencies, trip interruption coverage, and rental car reimbursement.

Better Financing Options

If you need to finance your car, many carmakers and dealerships offer special low-interest rates on their CPO inventory, sometimes almost as good as what you’d get on a brand-new car. That can mean smaller monthly payments and less money wasted on interest over the life of your loan. Plus, lenders see CPO vehicles as safer since they’re newer and come with warranties, which can help you get approved more easily or score a better deal.

Are There Any Downsides to CPO Cars?

Certified pre-owned vehicles come with some great perks, but they’re not perfect. Here are a few things to consider before you buy:

Higher Cost Than a Regular Used Car

One of the biggest drawbacks of CPO vehicles is price. Because they’ve been inspected, refurbished, and come with warranties and perks, CPO cars usually cost more than regular used cars of the same make, model, and year. You’re paying extra for peace of mind, but if you’re on a tight budget, that higher upfront cost can be a dealbreaker.

Limited Selection of Brands and Dealers

Not every brand has a CPO program, and even if they do, the selection can be limited. You may have to stick with authorized dealerships, which can mean fewer cars to pick from, especially if you’re picky about color or features.

Warranty Limitations

CPO warranties are a nice bonus but don’t assume they’ll cover everything. Depending on the brand, the warranty might be shorter or less complete than a new-car warranty, and some repairs or parts could be excluded. Always read the fine print so you know exactly what’s included—and what’s not.

Popular Certified Pre-Owned Programs

If you’re thinking about buying a CPO vehicle, it helps to know some of the best certified pre-owned programs from reputable automakers. These include:

• Toyota Certified Used Vehicles (TCUV): Toyota’s CPO program covers 160+ points and includes a 7-year/100,000-mile powertrain warranty plus roadside assistance.
• Honda Certified Pre-Owned: Honda’s program offers a 7-year/100,000-mile powertrain warranty, plus a 182-point inspection. Many Honda dealers also throw in extras like free oil changes or trip-interruption coverage.
• Ford Blue Advantage: Ford’s CPO program has two levels—Gold Certified (172-point inspection, 7-year/100,000-mile powertrain warranty) and Blue Certified (139-point inspection, 90-day/4,000-mile limited warranty).
• Hyundai Certified Pre-Owned: Hyundai stands out with one of the longest CPO powertrain warranties (up to 10 years/100,000 miles from the original in-service date), a 173-point inspection, and perks like rental car reimbursement and roadside help.

Not sure what to look for when buying a used car that’s certified? Search for these key features in the program:

Do Certified Pre-Owned Cars Require Special Insurance?

CPO vehicles don’t have special car insurance requirements. They’re insured like any other car. That being said, you should consider full coverage auto insurance to fully protect your investment. These coverages typically include:

• Liability insurance: Mandatory in most states, it covers damages to others if you’re at fault in an accident.
• Collision coverage: Pays for repairs to your car after a collision, regardless of fault.
• Comprehensive coverage: Covers non-collision-related damages, such as theft, vandalism, or natural disasters.
• Uninsured/underinsured motorist coverage: Protects you if you’re hit by a driver with insufficient or no insurance.
• Gap insurance: If you financed your CPO car, gap insurance covers the difference between the car’s value and what you owe if it’s totaled.

The cost to insure a CPO vehicle varies based on factors like the car’s make and model, your driving history, location, and chosen coverages. However, Mercury Insurance offers flexible options to tailor your policy to your needs and budget, including auto insurance discounts for safe driving, bundling, and more.

“We want our customers to feel secure behind the wheel. Choosing the right insurance for your CPO vehicle can help protect your car’s value and avoid major out-of-pocket expenses,” says Justin Yoshizawa, Director, Product Management State for Mercury Insurance.

CPO Car Shopping Tips

To make your car-shopping experience as seamless as possible, make sure to keep these tips in mind:

• Inspect the car inside and out: Check the tires, brakes, and lights, and look for signs of rust or previous repairs. Don’t forget to pop the hood and listen for unusual engine noises.
• Review the vehicle history report: A good report will show you previous accidents, service records, ownership history, and any title issues. This helps you avoid hidden problems that could cost you later.
• Ask the dealer questions: What does the CPO warranty cover? Has the car had any major repairs? Are there maintenance records you can see? Clarifying these details can prevent surprises down the road.
• Test drive and negotiate: Pay attention to how it accelerates, brakes, and handles. If you like what you feel, don’t be afraid to negotiate. Even with CPO vehicles, there’s room to get a better price, better financing terms, or additional perks to sweeten the deal.

FAQS About Certified Used Cars

Before you head to the dealership, here are answers to some of the most common questions shoppers have about certified pre-owned vehicles.

Can I return a certified pre-owned car?

It depends on the dealership’s or manufacturer’s return policy. Some CPO programs offer a short window (usually a few days or a set number of miles) where you can return or exchange the car if you’re not satisfied. Always ask about the return policy before buying so you know your options.

Are CPO cars worth it?

Yes! They’re thoroughly inspected, come with extended warranties, and often include extra perks like roadside assistance. While they may cost more than a regular used car, the added peace of mind and lower risk of costly repairs can make them a smart investment.

How long do CPO warranties last?

CPO warranties vary by manufacturer but typically last from 12 months/12,000 miles up to 7 years/100,000 miles from the original in-service date. Be sure to read the details of the warranty so you understand exactly what’s covered and for how long.

Final Thoughts

Certified pre-owned cars give you the best of both worlds—newer features and extra protection without the new-car price tag. Just do your homework and ask the right questions, and you can find a CPO vehicle that’s reliable, affordable, and perfect for your needs.

When you’re ready to hit the road, don’t forget to protect your new ride with the right insurance. At Mercury, we make it easy to get cheap car insurance without sacrificing quality coverage.

Contact us today for a fast, free quote!