Quick Facts About CPO Warranties
- Warranties come with certified pre-owned cars and provide manufacturer-backed assurances based on thorough inspections and quality criteria.
- An alternative to CPO warranties is purchasing a used car with an extended warranty for added protection against unexpected repairs.
- Ultimately, the decision depends on the reliability of the car, the terms of the warranty, and how much you value the assurance of coverage.
Most drivers interested in a used car are at least a little anxious about reliability. After all, used cars have, by definition, seen prior use — and that means they may not be quite as long-lasting as a brand-new model where you put on every mile yourself. The solution to this anxiety is a certified pre-owned (CPO) program offering manufacturer-backed warranties on used vehicles. But should you spring for a certified pre-owned warranty on a reliable car? We have some thoughts on the topic.
- What Is a CPO Warranty?
- CPO vs. Used Car Extended Warranty
- Is a CPO Warranty Worth It?
- Electric Car CPO Programs
What Is a CPO Warranty?
A CPO warranty is a specialized contract that covers certified pre-owned vehicles and is backed by the manufacturer to give buyers additional confidence when buying specific used cars. Certified vehicles pass a thorough inspection and reconditioning and meet the quality criteria the manufacturer or dealership sets. CPO cars meet those standards and also carry CPO warranty coverage, which often extends beyond the vehicle’s original new car warranty period to protect your budget in case of a part failure or breakdown.
The warranty period can vary widely depending on the automaker or dealer but typically lasts one to three years. It’s seven years for Acura. So, a 2-year-old Acura Certified Pre-Owned car will include five years of CPO coverage, which is an impressive amount — and possibly worth the extra cost. But a 4-year-old Acura will only have three years of coverage. Is that worth the additional cost? It probably isn’t to us, so we might skip the certified pre-owned warranty on an older model unless it’s available only at a slight price premium.
Another example is Lexus, with CPO warranties covering up to six years when combined with the automaker’s new vehicle basic warranty. The L/Certified by Lexus limited warranty lasts for three years from the date of the CPO purchase — and that means it’s a much better buy on older models (which are likely more prone to breaking) than it is on newer ones since you’ll only get three years of coverage either way.
What Does a CPO Warranty Cover?
Each CPO warranty is different. Coverage limits will vary from one manufacturer to another, but they often cover the vehicle’s major mechanical and electrical components, including the engine, transmission, drivetrain, and exhaust system. While the warranty will cover the cost of major repairs, it won’t typically apply to regular maintenance or wear-and-tear fixes. Even for reputable and reliable car brands like Honda, Hyundai, and Kia, a CPO warranty can be a wise choice if you’re concerned about unexpected repair bills. Like most factory warranties, any remaining CPO warranty coverage is transferable to the next owner.
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Pros of a CPO Warranty
- It provides extended coverage: A CPO warranty often extends beyond the original factory warranty, offering protection for additional years or miles. The manufacturer backs these warranties so you can have more confidence in the vehicle’s condition.
- It reduces your assumed risk: A CPO warranty protects your purchase against unexpected repair costs, reducing the financial risk typically associated with buying a used car. Knowing a warranty covers your vehicle can provide peace of mind.
- Its value: CPO status can enhance the vehicle’s resale value, making it a great option for future buyers. The warranties are often transferable, making them more attractive in the used car market.
Cons of a CPO Warranty
- The price: CPO vehicles will cost more than typical pre-owned cars. The warranty coverage is factored into the sale price. In some cases, the premium for a CPO warranty may not align with the actual value it provides, potentially making it overpriced.
- The coverage limits: CPO warranties might not cover all types of repairs. There may be exclusions or deductibles that limit your coverage. Always read the coverage terms to confirm what falls under their umbrella of protection.
- They’re potentially unnecessary: A CPO warranty might not be essential for reliable car models. There’s less risk of significant repairs or breakdowns.
- There is no industry standard: Each automaker has different terms and conditions for its CPO criteria and warranties. As the buyer, this leaves you to examine the fine print and determine if the added coverage is worth the extra cost.
RELATED: Is the Factory Warranty Transferable When Buying or Selling a Used Car?
CPO vs. Used Car Extended Warranty
CPO warranties apply to vehicles that meet automaker certification standards. Extended warranties are available for non-certified used cars through third-party companies, and they offer more flexible coverage options depending on your budget.
If you’re shopping for a reliable used vehicle and a CPO is not available or outside your budget, you can consider buying a used car with an extended warranty. This could help you balance costs and still offer purchase security. Compared to CPO vehicles, conventional used cars are generally more affordable upfront, making it financially easier to add an extended warranty for supplementary coverage if you decide.
Good extended warranties typically cover a range of mechanical and electrical components in a used car. Coverage limits will depend on the specific warranty plan you choose, and many options include additional benefits like roadside assistance and rental car coverage.
By selecting the right extended warranty, you can potentially enjoy a level of protection comparable to what you’d get with a certified pre-owned vehicle, all while staying within your budget. This option may benefit those seeking reliable transportation without paying the CPO premium.
RELATED: Extended Car Warranty: How to Choose the Best One
Is a CPO Warranty Worth It?
Even if you’re eyeing a newer, reliable car model, a CPO warranty can still be worth it for the peace of mind it offers. The biggest variable is exactly how much extra you’ll have to spend to get a certified pre-owned warranty. If you can find a reliable model with a CPO warranty for just a slight price increase over a non-CPO car, we’d be inclined to do it. But if the price difference is significant, we’d walk away.
For example, say you find a used 2022 Honda Accord for $26,500 and a relatively similar HondaTrue Certified model for $27,500. We’d probably pay the extra $1,000 for that peace of mind and additional warranty coverage. But if the prices were more like $26,500 and $29,500, it’s harder to justify the additional $3,000 on a car as dependable as the Accord.
That said, a driver who has suffered an engine or transmission failure might feel differently. While we’d suggest walking away from a CPO car with a high price premium over a standard model, the real answer to this question is this: whether or not you should get a certified pre-owned warranty on a reliable car depends on exactly how much you value peace of mind.
If you trust the car won’t break down, don’t pay anything extra to get the warranty. But if you want to drive along knowing you’re covered in case of any issues, no matter how unlikely, then you might find that a CPO car is worth a few hundred dollars — or a few thousand dollars — more than a traditional used model.
MORE: Do You Need to Service Your Car at the Dealership to Keep Your Warranty Valid?
Electric Car CPO Programs
CPO programs work a bit differently for electric vehicles (EVs). Depending on the manufacturer, the program may provide extended powertrain warranty and EV system coverage. Instead of evaluating internal combustion engine parts and function, a CPO electric car must pass inspection of battery capacity, regenerative braking system, charge port, and other EV-specific features. Federal law requires manufacturers to cover EV batteries for eight years or 100,000 miles.
As you should with any CPO car, read the fine print of the CPO program for electric cars. Warranty terms, conditions, and coverage vary from manufacturer to manufacturer.
Overall, carmakers design CPO programs and warranties for EVs to give buyers confidence in the long-term reliability and performance of the vehicle’s components. This approach recognizes the unique nature of electric vehicles and addresses EV owners’ specific concerns and expectations.
Editor’s Note: This article has been updated since its initial publication.
