I’m searching for a good, used car and have explored what’s around, as well comparing prices. Do you have any ideas to make my search easier? – Abner Auto
Dear Mr. Auto: U.S. News and World Report explains the two avenues we should search when buying a used vehicle – either a certified pre-owned car with factory warranty coverage or a car that’s not certified and buy an extended warranty. Let’s look at the difference.
Ellen Phillips A certified pre-owned vehicle (CPO) undergoes a comprehensive multi-point inspection by the original manufacturer to ensure that the car is in excellent shape. Cars considered for certification are gently used and have relatively low miles, no history of major accidents, and a clean title history. Mostly, these vehicles are just a few years old and, after certification, are sold with warranty extensions past the vehicle’s original limited warranty. In addition to extra warranty coverage, CPO cars typically include 24-hour roadside assistance, dealer loaner cars, trip interruption coverage, and more. The extended warranty and other benefits you receive vary by manufacturer. Some require a deductible for each covered repair, while others don’t.
You can only find factory-certified cars at their brand’s franchised new car dealers. For example, if you see a certified Honda at a Porsche dealership, it’s not a factory-certified pre-owned car.
Sometimes a dealer will offer to “certify” a car after you agree to purchase it. However, that’s not how factory certification programs work but, instead, likely a ploy the dealer is using to sell you an extended warranty. Many certified pre-owned models are lease returns which, for the most part, are in good shape and have low mileage. Some have time or miles left in their original warranty, plus manufacturer-backed additional warranty coverages. Other CPO cars are those used by dealership or manufacturer dealers and staff, while some are just lightly used trade-ins that pass the multi-point inspection process.
An extended warranty is an add-on product that can be sold with nearly any used car. No inspection or certification process is required before we can buy an extended warranty, plus we’re able to purchase one at the dealership when buying or at a later date from the warranty company itself, a financial institution, or the company that handles our auto insurance. Extended warranties work very similarly to insurance policies to protect one’s wallet from the cost of unexpected repair bills. In some states, the sale and performance of extended warranties are regulated by state insurance commissioners. Some extended warranty products are available from the automaker who built the car, though many come from third-party companies. Some warranties provide extra vehicle coverage while, on the other hand, others feature roadside assistance and a number of extras. Be aware, though, that overage from an extended warranty or service contract can vary enormously; some require a deductible for covered repairs, inclusionary contracts only cover a set list of vehicle components, and exclusionary contracts cover all parts, except for those specifically listed. (Exclusionary contracts for used cars are usually higher-priced than inclusionary service contracts since they cover more of the vehicle’s possible glitches.
If you are considering a pre-owned vehicle with only a few miles on the odometer, the former may still be covered by its original limited warranty. (Unless you’re like me both when I taught and currently – the stereotypical little, old, lady schoolteacher who drives fewer than 3,000 miles annually. The mechanic/dealer always thought I had rolled back the odometer!) In fact, many original factory warranties are transferable to second owners so always look at what coverage the car may still have before spending any extra bucks on additional protection.
While Mr. Abner Auto and other readers may be ready to buy a certified used vehicle or an extended service contract, one step is mandatory before opening your wallet or talking to the finance manager. A must-do for any pre-owned vehicle prospective owner is to personally check a comprehensive vehicle history report from a company such as Carfax or AutoCheck.
(To be continued)
Tax Tip: Even though the new standard deduction is much more generous than in the past, it still behooves those of us who’re used to itemizing to compare the two. We can donate the fair market value of the charitable property as long as the items didn’t appreciate in value. In fact, according to Forbes.com, our percentage limitation increases this tax reporting season to 60 percent of our adjusted gross income.
Contact Ellen Phillips at consumerwatch@timesfreepress.com.