- Certified Pre-Owned Vehicle (CPO) is a way to buy a gently used car, truck or SUV from a dealer with fewer miles than you might find on a traditional used-car lot.
- Right now, with used car prices up 10% in May from what they were in 2021, it’s hard to get an affordable used car of any kind.
- On the brighter side, the deal value is up 72% from 2021, so you could get a deal on the other end of the deal if you have a car for sale.
Today’s car market is like the real estate market. Go anywhere across the country and you’ll find the same situation: It’s a great time to sell and a bad time to buy.
New and used car inventories have an extremely difficult long way to go to recover to pre-pandemic levels in early 2020. On average, according to JD Power, a new car is only available in agent for 36 days prior to being sold. While auto dealers are swimming in profits and record sales despite less volume — in April, dealers more than double their average profit margin since last year and can make $5000 on every new car they sell—automakers don’t have that luxury. They’re eager to ramp up production, but since they can’t right now, they’re relying more on certified pre-owned (CPO) Sale comes with an extended factory warranty.
Used cars are no ordinary value game, at least not right now. In May, according to auction house Manheim, used car prices has increased by 10 percent compared to last year, which was up double digits from 2020. Inflation is at a 40-year high. So can you still get a deal?
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Used car inventory is relatively large, but you will get less cars for the money
In 2021, Americans bought a record 40.9 million used cars. More than half are sold by dealers (including non-franchise companies like CarMax). JD Power speak Average commercial value increased 72% in April. That, along with less than 2.2 million new cars available for sale in early May, helps explain why your 2018 Toyota Camry is worth as much (or more) than its original sticker price.
Looking at the raw numbers, buying used seems to be the way to go for most people right now. According to Cox Automotive, as of early May, there were 2.5 million used cars and 1.1 million new cars in stock. CPO cars make up a small portion of total used car sales — on track to hit three million this year — but they’re often backed by low-interest financing that dealers don’t franchise cannot match. Currently, the used car market has Deliver 48 days and the average price is nearly $20,000 less than a new car. When you consider that the average price of a new car is raise $45,000With the average used car traveling nearly 70,000 miles and interest rates skyrocketing, your money in 2022 doesn’t go as far as it used to.
CPO switches to older cars, high mileage
Traditionally, CPO cars have limited mileage so they appear more appealing to new car buyers and are in good enough condition that the automaker can warrant them for an extra year. They are typically late-end, late-rent cars with mileage under 40,000 miles. But many automakers are stretching their definition of a CPO vehicle.
In the fall, Nissan will non-Nissan vehicle certification with a six-year/6,000-mile warranty, slightly shorter than the seven-year/100,000-mile warranty that Nissan products receive. General Motors will debut CarBravo, a new consumer CPO service that allows GM dealers to certify any of the brand’s vehicles. “We will be able to certify a used Toyota with a mileage of 87,000 km,” a Chevy dealer said. Automotive News. Ford is selling all brands of vehicles under the Blue Advantage program with 120,000 miles and offers a 14-day/1000-mile return policy. Honda is 10 year old car certification There is no mileage limit under the used HondaTrue program, although Acura currently limits mileage to 80,000 miles. Many automakers have the ability to join the old, high-mileage trend so they can cash in on current needs.
Less quality checks, higher potential risks
The CPO cars are expected to undergo a lengthy inspection, in which dealership technicians check nearly 200 items on a single sheet of paper. The automaker sets the conditions and performs field inspections, but CPO cars are not inspected by factory personnel. It’s usually a tech at a dealership.
This isn’t to say that every CPO vehicle is a potential hazard — after all, there’s an extended factory-backed warranty to cover any unchecked issues — but it does. It’s a frantic time as dealers scramble to sell cars as fast as they can. , so keep that in mind if you want to put all your trust in one checklist and keep your eyes open. To make matters even more confusing, automakers with high mileage CPO programs now have multiple grades of CPO cars with distinct names — and each has very different certification requirements. . For example, Honda currently has three CPO labels (HondaTrue Used, HondaTrue Certified, HondaTrue Certified+) with all different warranties and age restrictions. Ford tested 139 points for Green Certified vehicles compared to 172 points for Gold Certified vehicles. Not all are right for every buyer, and you might be better off with a newer, non-CPO car without the added warranty coverage.
All of this to say: It’s the most frustrated buyer market in decades. But if you have to replace a vehicle and think CPO is the way to go, make sure you know what’s in store. The terms and conditions of the economy have changed.
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