How a Vehicle Becomes a Certified Pre-Owned Car

When you’d rather take a light dip into your savings to purchase a pre-owned car rather than a deep plunge into a new one, no longer do you have to be concerned about the quality of the vehicle you’re buying secondhand. Thanks to manufacturer’s certified pre-owned programs, the consumer has assurances that the used car they have been eying isn’t hiding faulty wiring, a blown head gasket or a spastic transmission.

These aren’t just random used cars. Keith Rey, General Manager of Marin Honda in Corte Madera, CA divulges the origin of certified pre-owned (CPO) cars: “Most of the vehicles that enter the CPO program are lease returns or cars that Honda has sold at a closed auction, which can only be attended by dealers.”

But, some may ask, what happens after the dealer acquires the cars? Well, they certainly aren’t just pulled into the lot to await buyers.

Deal Breakers
Surprisingly, CPO programs aren’t regulated throughout the industry, and many manufacturers have different acceptance qualifications for their potential certified used cars. These include mileage and age maximums, as well as issues that can demand immediate disqualification, like the discovery of aftermarket parts, engine modifications and any sign of structural damage or odometer rollbacks.

If a car is more than eight years old it won’t qualify for any of the current CPO programs, and some manufacturers have even stricter age limits than that: Chevrolet rejects any cars more than five years old, and Lexus won’t accept those over the age of six.

Another basic prerequisite for certified status is the mileage limit. Manufacturers well known for their quality, like Toyota and Mercedes-Benz, reflect this distinction in their high maximum mileage allowance, ranging closer to the 100,000-mile marker than the industry average of 48,000-80,000 miles. Ford, for instance, requires less than 80,000 miles on the odometer for a car to enter their CPO program.

Rey reveals even more deal breakers: “a car must have a clean VIN check, a clear Carfax vehicle history report and needs to pass the certification process. It can’t have a branded title or lemon law against it either.” The dealer must confirm that none of these issues are a problem before continuing to the inspection stage.

Point-by-Point Inspection Process
Once a car upholds the first round of requirements, it must go through a mechanical and cosmetic inspection. Again, each manufacturer has slightly different standards to which they uphold their CPOs, but detailed inspections of the entire vehicle are always mandatory and standardized within the company.

The mechanic runs through a compulsory checklist to confirm the car is in proper condition. Everything from the minor - ‘license plate lights work’ to the serious - ‘brakes operational’ has to be covered.
These steps are reassuring to buyers. Jessica Hayward of San Francisco, California owns a certified pre-owned Volkswagen. “I knew that, by it being a CPO, the dealership was guaranteeing that it wasn’t a lemon and that it’s pretty much like buying a new car,” she says, “so I felt much more comfortable putting my money down and driving off the lot.”

While all checklists cover certain items like whether or not the car makes strange noises or the clutch works, some seem more detailed than others. Subaru has just a 152-point inspection, half of what Audi’s entails. But even cars built for the rich and famous, like Bentleys, don’t match Audi’s 300-plus list – the English automaker requires only a 154-point procedure.

Why the difference? It all comes down to the specificity of the lists. Audi’s is very detailed, with individual checkmarks required for a review of things like the left side mirror and the right, while most of the other companies lump the two together. Of course, the more technology options available when purchasing a new vehicle – think navigation systems, four-wheel drive or XM radio antennas – the greater number of systems needed to be reviewed in order to clear a CPO. If a manufacturer doesn’t even utilize some of these items, there’s no reason for them to show up on a checklist.

If anything is found to be short of the stringent standards, the defect is repaired. This is the time when cigarette burns in the seats and dents in the body vanish. By the end of the inspection and repair process the technicians have essentially restored the car to the condition it was in when it first left the dealership.

And those that don’t make it? “If there’s a repair that may cost too much money or it’s just too far out of bounds of the requirements, then it won’t be a certified car,” Rey explains. “It could be sold as a wholesale or non-certified car without a warranty though.”

Those that have successfully passed testing will each have a Carfax vehicle history report associated with them and a sticker in the window describing whether or not the car is available with a warranty. And all pertinent information like warranty details and servicing receipts will be available to potential buyers.

Two-time CPO buyer, Jeffrey Dillow of Boston, Massachusetts is positive about his purchases. “Essentially, we were able to spend much less money by buying a used car. For me though, a big part of the decision has always been the convenience and peace of mind associated with CPO programs.”

[Not offered as CPOs: Aston Martin, Bugatti, Maserati, Lotus, Maybach, Panoz, Lamborghini and Rolls-Royce. There goes your idea of getting a Phantom on the cheap.]