Certified Pre-Owned vs. Off-Lease Cars: Which Is Better?

Quick Facts About CPO vs. Off-Lease Vehicles

• Certified pre-owned vehicles pass a thorough inspection before sale and offer excellent warranty coverage.
• Off-lease cars are often newer models with low mileage and more modern features.
• Both types may have limited availability, so you might not find a vehicle with all of the features you want.

Certified pre-owned (CPO) and off-lease vehicles both have benefits and drawbacks. As prices for new cars remain high, these used car buying options are often more affordable without sacrificing quality. However, there are other pros and cons to consider. Keep reading to learn the differences between the two to help you decide which is right for your needs.

• Certified Pre-Owned Cars
• Off-Lease Cars
• Which to Buy, a CPO or an Off-Lease Car?
• Vehicle History

Certified Pre-Owned Cars

A certified pre-owned vehicle appears gently used by the previous owner, is typically under six years old, and has fewer than 80,000 miles on the odometer. It seems almost new in every other way. All CPO vehicles undergo extensive, manufacturer-required, multipoint inspections and repairs, as needed, to restore all functions to factory settings. These details give the buyer confidence that they are buying the best the brand offers in a previously owned vehicle. CPOs have extended warranties providing protection for additional years and, in some cases, unlimited mileage during the time the second buyer has the car.

Pros of a Certified Pre-Owned Car

Specific advantages of buying a CPO car can vary depending on the manufacturer, dealership, and certification program. Your research should include comparing local certified pre-owned programs to find the best deals and benefits.

Here are some common reasons many drivers choose a CPO:

• Warranty – Arguably, the most attractive benefit of a CPO vehicle is the warranty. The manufacturer will extend coverage that protects your wallet in case of a major breakdown.
• Vehicle History – Your CPO vehicle should include a detailed driver history report. This document will outline maintenance records and accident reports. It may also include the number of previous owners, which is typically lower than uncertified used cars.
• Reliability – Dealers and manufacturers have stricter qualification standards for their certified pre-owned vehicles. A CPO also tends to have lower miles, which helps bring confidence that it will remain reliable for the years to come.
• Financing Offers – Dealers often attract buyers with competitive deals for financing a CPO purchase. Look for deals such as lower interest rates, longer loan terms, or cash-back incentives.

Cons of a Certified Pre-Owned Car

• Price – CPOs usually have higher prices than standard used vehicles of similar make and model. However, the overall value may be greater since they have a thorough CPO inspection and warranty coverage.
• Limited Availability – High qualification standards mean only select vehicles become certified. Since CPOs are a popular option for buyers in the used market, there may be very little inventory when you start your car shopping journey.
• Inconsistency of Standards – There is no “industry standard” for the CPO certification process. Some manufacturers may have more rigorous safety criteria, while others may examine body parts and interior finishes with more scrutiny. Always ask what standards the manufacturer outlines in its certification program.

CPO Qualification Criteria

To qualify for CPO status, cars pass inspections that evaluate the vehicle’s history, body, driving functions, body and mechanical components, and more. While certification inspections vary among automakers, the differences are minor. For marketing purposes, more boxes to check might give the impression of a more thorough inspection. However, the difference between one manufacturer’s 172-point list and the 182 checkpoints of another’s CPO program is relatively insignificant.

So, don’t get hung up on how many inspection points a CPO car has. Some checklist items, such as heated seat operation, don’t apply to all vehicles. Other items help ensure the vehicle is as close to brand-new as possible but are likely not deal-breakers, like opening and closing the sunglasses holder.

MORE: Who Is Responsible for a Defect After You Buy a Car?

Manufacturers That Offer CPO Cars

Lexus was the first brand to offer a CPO category of vehicles starting in 1993. The classification elevated its brand of used vehicles to stand out when viewed against the competition. Here, a customer could choose between a pre-owned BMW, for example, with a limited warranty, or a Certified Lexus that factory-trained technicians reconditioned and had extended warranty coverage.

While Lexus was the first, many others have joined the cause, offering factory-certified vehicles. Their ranks include Honda, Hyundai, BMW, Volvo, Audi, Mercedes-Benz, Ford, Porsche, Cadillac, Kia, Acura, and Chevrolet. Many of these programs offer extended years and unlimited mileage, service loaners, and 24-hour roadside assistance to sweeten the deal.

RELATED: Is a CPO Warranty Worth It on a Reliable Car?

Off-Lease Cars

An off-lease vehicle is a car that returns to a dealership after the lease term ends. When someone leases a vehicle, they have the option to purchase it when the contract concludes. If they don’t buy the car, it returns to the dealership. It’s then referred to as “off-lease.” These cars are sold as lightly used vehicles. In many cases, they’re still in excellent condition with low mileage.

An off-lease vehicle can be a great option for drivers looking for a newer-model used vehicle with low mileage. In general, off-lease cars are three years old or less, and driving a vehicle with the latest technology and features is desirable to many shoppers, especially at a fraction of the price of a new vehicle.

What about warranties? Most factory warranties cover vehicles for three years or 36,000 miles. If its original lease was shorter, an off-lease car may still have some factory warranty coverage. Most dealers with pre-owned lots will offer extended warranties, which you should read and understand before you consider purchasing. Some dealerships are specialists dealing exclusively in selling off-lease vehicles.

Pros of Off-Lease Cars

• Low Mileage – Leased vehicles have mileage restrictions. Drivers can only drive a certain number of miles (usually 10,000-12,000 per year) without incurring steep penalties. This limitation means that off-lease cars typically have lower mileage than CPOs.
• Gently Used – The average lease contract lasts two to three years. Many lessees take great care of their vehicles to avoid fees for excess wear and tear. Off-lease vehicles are often in like-new condition.
• Warranty Coverage – Off-lease cars with a shorter contract term may still be covered under the manufacturer’s original warranty.

Cons of Off-Lease Cars

• Wear and Tear Repairs – Some off-lease vehicles may be due for routine maintenance tasks, like brake service and tires, leaving you as the new owner to foot the bills.
• Price – Like CPOs, off-lease cars can cost more than standard used vehicles since they’re still quite new. Additionally, they’re less likely to have special financing offers like certified pre-owned options.
• Warranty Coverage – As mentioned above, an off-lease vehicle is often covered under the manufacturer’s standard warranty. However, depending on how long the warranty lasts, you may be out of coverage within a year or two. Unlike CPOs, no additional coverage is typically offered at the time of purchase.

Which to Buy, a CPO or an Off-Lease Car?

Choosing between a CPO or an off-lease vehicle comes down to your specific circumstances and preferences. Here are some factors to consider when deciding between the two:

Do you want a newer vehicle? An off-lease car may be a better choice since most leases are for new vehicles and only last two to three years. Some CPO vehicles can be several years old.

Are you prioritizing warranty coverage? CPOs usually have enticing extended warranties that are backed by the manufacturers. An off-lease vehicle will have only the remaining factory warranty.

Are you looking to purchase as soon as possible? If you want a specific make and model, you’ll have better luck finding an off-lease vehicle that meets your needs.

Are you on a tighter budget? The average CPO car is under five years old, but some manufacturers certify vehicles up to 10 years old. Older CPOs will generally be more affordable than newer, off-lease vehicles, so this might be the better option if your budget is tight.

Use Autotrader’s Affordability Calculator to help determine the price range that’s comfortable for your budget.

Is an Off-Lease Car a Good Idea?

An off-lease car can be a great option for drivers looking for a newer-model used vehicle with low mileage.

Do I Need a Loan for an Off-Lease Car?

Like all vehicles, loan requirements will depend on your budget and the purchase price of the vehicle. Some off-lease vehicles can cost as much as a new car, so you may need a loan to cover the cost.

Vehicle History

Let’s say you find your next new-to-you dream car on a local dealership lot, whether CPO or not. Even seasoned buyers can use a reminder to ask for a vehicle history report. The report from services like AutoCheck and Carfax provides detailed information on a vehicle’s accidents, repairs, and maintenance so you can have confidence before buying.

If you bypass the dealership and take the private seller route, you can ask the seller for a report, which can help show you they’re forthcoming about the car’s condition. An individual seller may also be able to provide the vehicle’s maintenance history. If you use Autotrader’s Private Seller Exchange, we review the vehicle’s ownership and accident history to ensure it matches our registration and inspection information.

Editor’s Note: This article has been updated since its initial publication. Mark Elias and Chantel Wakefield contributed to the report.