Should You Buy a Certified Preowned Car?

Updated on July 9, 2008.

YOU DON'T NEED US TO tell you that buying a used car can be a stressful experience.

But there's one way to alleviate some of the fear that you'll drive off in a dud: You could opt for a certified preowned vehicle. All certified vehicles are inspected by a manufacturer-trained mechanic and come with extended warranties that are backed by the manufacturer. Many programs even throw in extra services that once were offered only with new vehicles. BMW, for example, provides free roadside assistance.

Not all programs are failsafe, however. While some warranties extend for several years, others last just a few months. And there's always the chance some unscrupulous dealer will try to pass off any old car as an officially certified vehicle.

Here's how to get a good deal.

Delve Into the Details
Some certified preowned programs are much more comprehensive than others. Chrysler, for example, offers an eight-year or 80,000-mile warranty, roadside assistance and loaner car reimbursement, whereas Jaguar's warranty covers just six months or 10,000 miles and doesn't offer loaner car coverage, according to Edmunds.com. For a complete listing of programs, see Edmunds.com.

Prepare to Pay for Peace of Mind
Considering all the perks and assurances that come along with a certified preowned vehicle, it makes sense that these cars are more expensive than ones that come without a manufacturer's stamp of approval.

How much more can you expect to pay? That will vary by make and model, but the difference tends to increase with luxury cars, says Jack Nerad, editorial director Kelley Blue Book. According to figures from auto web site Edmunds.com, you could expect to pay an average of $22,056 for a certified 2006 Ford Explorer Eddie Bauer four-wheel drive SUV. (The original MSRP in 2005 was $36,350.) If you bought that same truck, uncertified, from a dealership, it would cost an average of $20,426. An individual would charge an average of $18,788.

Watch Out for Dealer Certified Vehicles
There are two types of certified preowned vehicles: ones that are backed by the manufacturer and ones that are certified by someone else. Watch out for dealerships and independent used car lots that simply slap a "certified" sticker onto a windshield and then try to pass that vehicle off as having gone through the same checks as dictated by a manufacturer's program. Dealer-certified cars tend to have less-stringent inspection policies and shorter extended warranties than manufacturer-certified vehicles, says Steve Nolan, spokesman for Cars.com.

How can you tell the difference? First, only a branded dealership can sell its own manufacturer-certified vehicles. So if a BMW dealer is trying to sell you a Mercedes, or if you're shopping at an independent lot, you can be confident that the vehicle in question is dealer-certified. It's also a good idea to ask to see all the paperwork that guarantees the car is backed up by the manufacturer, says Karl Brauer, automotive expert with Edmunds.com.

Go Online
Even with certified vehicles, you need to make sure you're getting what's advertised. "We've found that some dealerships are willing to certify cars that wouldn't meet another dealership's criteria," says Kelley Blue Book's Nerad. Fact is, even though all dealerships must make sure that their certified inventory passes the same 100+ point inspection process, there's some wiggle room that's left to the mechanic's judgment. So while one mechanic might think it's fine to certify a car that has been in a small collision but is otherwise running well, another might not, says Nerad.

To protect yourself, make sure you ask for a full maintenance history and inspection report, and run a vehicle history report from CarFax or AutoCheck.

For more on buying a used car, see our story.