New vs Certified Pre-Owned
By Jakob Hansen, 10/1/2020
New vs Certified Pre-Owned, what option is best for me?
When looking for your next vehicle, the first bridge to cross is deciding to buy new or used. But many of us forget about the interesting middle ground known as Certified Pre-Owned. Let’s take a look at what options will work best for you and your family, and why.
What is a Certified Pre-Owned Car?
To start, let’s reiterate the differences between new and CPO. We covered this more in-depth in our How to Shop for a CPO post, so we’ll just do a quick rundown here.
A “new car” is exactly as it sounds, a never before purchased vehicle that is fresh off the assembly line.
A traditional pre-owned vehicle is any car that has been bought before. It could have been bought, never driven, and sold with zero miles on the clock, but would still qualify as a pre-owned vehicle.
A Certified Pre-Owned ar is a pre-owned car that has gone through a rigorous inspection process, had any broken or worn items replaced, and comes with an OEM certified stamp of approval. Think of it as a used car in “like-new” condition.
Why Choose To Buy New?
There are a nearly endless amount of reasons why you would choose to purchase a new car over pre-owned. For one, you know the history. You know who’s driven it, where it’s gone, the service history, and what every blemish is from.
As the old hommage goes, you’re not buying someone else’s problems. And while that’s not always the case, you can be confident that you’re not purchasing a vehicle with any preexisting conditions.
The downside? The cost. Namely, depreciation.
With a new car, you pay new car prices, and what that comes with is an on average 10% drop in value within the first month of ownership, according to CarFax.
With pre-owned, you don’t have to worry about these issues.
Why Choose Pre-Owned?
When you purchase a pre-owned car, what you’re really buying is value. You’re paying less than retail for a car that has some miles on it.
This can come with several clear benefits. Lower monthly payments, lower down payment, less depreciation, and so on.
However, there are some clear downfalls as well. For one, it’s not brand new. You don’t know the history, who’s sat in it, where it’s gone, or who’s worked on it. And, unfortunately, you are occasionally buying someone else’s problems.
What’s more, the only warranty the vehicle comes with is what was new from the factory. Depending on how many miles are on the vehicle or how old it is, you could be left with little to no warranty left.
This is where Certified Pre-Owned car, trucks, and SUVs comes into play.
Why Choose CPO?
Certified Pre-Owned takes what’s good of new and pre-owned and drops off the bad.
Cars that are Certified Pre-Owned come with a full inspection of the entire vehicle, checking mechanical and non-mechanical items, even bodywork is checked over.
Certified cars also come with an extended warranty, oftentimes one that is superior to that which the car came with new.
CPO cars, trucks, and SUVs also have a full vehicle history. The CarFax (or equivalent) is checked and no vehicle with an accident or flood damage is certified. Many CPO cars are lease turn-ins, which means service during the lease was performed at a certified dealer and service history can be tracked.
Beyond all of this are the cost savings. When buying a CPO car, you no longer need to worry about the massive depreciation hit a new car comes with over the first few years. And even though a CPO cost can be somewhat higher than a comparable non-CPO used car, the peace of mind of a full warranty and pre-purchase inspection is worth the additional cost.
Let’s take a look at an example of how CPO compares to new.
When comparing a new Chevrolet Equinox to a CPO Equinox there are several factors that come into play.
First, it’s important to know when a model change over was. For the Equinox, the last major change was back in 2017, meaning every Equinox sold between then and now is more or less the same, save for a few minor updates or details.
This is important because a CPO Equinox LT is essentially the same exact vehicle a new Equinox LT. You’re not missing out on new technology by purchasing a vehicle from a previous model year.
Next is overall cost. MSRP for a Chevrolet Equinox LT AWD starts between $29,100 and $31,600, depending on options and add ons, and can clearly go up from there.
In a quick search of our local Chevrolet dealers, we were able to find CPO Chevy Equinox LT AWD options between $19,000-$21,000, depending on miles.
You don’t have to be a math major to see the savings here.
If you bounce over to our Top CPO Programs, you’ll see that Chevrolet CPOs come with a 6-Year/100,000-Mile Powertrain Limited Warranty, 12-month/12,000-Mile Bumper-to-Bumper Limited Warranty. They also come with a 172-Point Vehicle Inspection which checks every component of the car, ensuring it’s safety, reliability, and appearance.
As you can see, every type of sold vehicle has some sort of benefit. Whether you like the peace of mind of a new car, the affordability of a used car, or the combined value of a CPO, they all have their place in the market.
Here at Rydeshopper, we strongly feel that CPO vehicles are the best value dollar for dollar.
Everything adds up to getting the best of both worlds, and that’s a value pitch we can get behind.