Certified Pre-Owned: Do or Don't?

05/28/2015 06:00 pm ET | Updated May 28, 2016

There are three types of answers I just can't stand to hear. Any answer that begins with an all-knowing "So...," "Yes and no," or "It depends," all drive me completely bananas. On the surface, these answers seem weak and evasive, but dig deeper and you'll discover they're not really answers at all.

Unfortunately, "It depends" is the exact answer I have to give when people ask if buying a certified pre-owned (CPO) car, versus a used car, is worth the extra money. Of course, the easy answer is "yes." Regardless of all other factors, a CPO buyer is getting something of value when purchasing a certified car, and like Alex Forrest in Fatal Attraction, that just can't be ignored.

Good CPO Warranties
Many brands have decent certified programs, so it's hard to go wrong. For example, buy a certified pre-owned Toyota and you get a one-year or 12,000-mile warranty from the day you buy the car. You also get a seven-year or 100,000 mile powertrain warranty and a year of roadside assistance - many other brands have very similar plans. Here's a list of some of the better certified warranties as selected by Autotrader's editors.

The powertrain portion of the Toyota warranty is measured from the time the car was first sold as a new car, so you have to do some checking here. Depending on the mileage and model year of the CPO car you're buying, the value of the benefits will vary.

CPO vs Used
But here's why I say "it depends." Say you're buying a two-year-old Toyota Corolla with 22,000 miles. Even if you bought this as a non-certified car with cash from your neighbor, you'll be covered by Toyota's basic new car warranty that fully transfers to subsequent owners and will still be in effect for another year or 14,000 miles - and that's in addition to another three years or 38,000 miles of powertrain only warranty protection. It's a benefit that's essentially a testament to how strong Toyota's new car warranty is right from the start.

True, a certified Toyota will add two years to that powertrain warranty, but will you need it? Most modern cars are reasonably reliable, and that predicted reliability is probably why you're opting for a Toyota in the first place. Ditto for Acura, Chevrolet, Honda and Mercedes-Benz; all are better than average in terms of reliability according to the Long-Term Quality Index.

All of this only matters because the price of a certified car is generally higher than the price of a used car. Think of a used car as a car you might find for sale parked on the street corner or listed by a private party on a site like Autotrader or Craigslist.

A certified car has been inspected and backed by that vehicle's manufacturer with an extension of the factory warranty. Certified cars can cost you and extra $1,000 or more versus a typical used car. If you're an economy-car shopper and are hyper-concerned with a low purchase price, that extra money won't make sense.

Luxury Cars and Rugged Trucks
On the other hand, anyone buying a used luxury or performance car should strongly consider the CPO version of a car over an as-is used car. Luxury cars have lots of extra comfort and convenience features and are more complex than other, more ordinary cars. Plus, the expense of repairing some of these cars will be higher than other non-luxury cars because luxury and performance cars are engineered to a higher standard or use components made using more expensive materials or processes.

The same is true of vehicles with all or four-wheel drive - get a certified model.

Terms Matter
Not all CPO programs are the same. The length and terms of the extended warranty vary and some require you pay up to a $100 deductible each time you need warranty work. Some have transferrable warranties, while others cannot be passed on. In fact, not all new car warranties are totally transferrable to the second or third owner and that can impact the value of a certified car.

Say you're considering a used Hyundai or Kia. Both brands have a well-deserved reputation for building attractive and reliable cars backed by industry-leading warranties. If you're buying a Hyundai or Kia from a private seller, you won't get that stellar 10 year / 100,000 mile powertrain warranty. That is for the original owner only. However, if you buy a certified pre-owned Hyundai or Kia, then the original factory warranty remains intact. In this case, it really makes sense to seek out a certified pre-owned Hyundai or Kia versus a non-certified used Hyundai or Kia. The exception might be if you're looking to buy one with a more than 100,000 miles on it.

Program Perks
Other programs are more or less compelling depending on your needs. General Motors, Ford and a few others offer perks like free trial subscriptions to satellite radio and the expected roadside service. Certified vehicles from Buick, Chevrolet and GMC also include two years or 24,000 miles of free scheduled maintenance. Acura provides travel planning and concierge services.

In some cases, these program perks don't necessarily add up to a ton of monetary value, but translate into the kinds of positive and trouble-free experiences most consumers are looking for. Still, the GM Certified web site says their program adds $2,135 of value to a typical CPO vehicle.

All used-car shoppers want a trouble-free car that fits their budget and lifestyle. Certified Pre-Owned cars can do that, but look closely at the terms and make sure you're getting something that's valuable to you. If you're buying a luxury car or one where the new car warranty doesn't fully transfer, get a certified car. In the end buying a manufacturer certified pre-owned car may not save you money in the short term, but it will save you time and worry over several years. For some of us, that's even more valuable than money.