Certified 'Like New' Pre-Owned Cars Can Have Major and Costly Problems

Just because a car is certified doesn't mean it hasn't been through a major overhaul

Cerified Preowned Cars Might Not Be Good Bargains
Image: NCCC
October 3, 2018

There are a lot of advertisements about certified 'like new' pre-owned vehicles that go through multi-point inspections. But is all the hype about peace of mind and reliability really worth the higher price tag these vehicles carry? You may be surprised to hear that vehicles with extensive repairs sometimes receive this distinction.

certified pre-owned Costs more but isn't really better

Certified pre-owned vehicles typically sell for higher prices because consumers believe they are a better value and because they typically come with perks, such as free loaners for repairs or an extended warranty. But when asked, many consumers have higher expectations and think that certified pre-owned vehicles are in excellent shape, especially if advertisements make claims that the car is "like new."

Too many potential buyers mistakenly believe that certified pre-owned cars have a pristine history, received proper maintenance, and are free of any body damage. But that's not always the case. In fact, vehicles that have had significant (but repaired) collision damage make it through these inspections. There really is no guarantee that these vehicles were properly repaired. How can a vehicle that had significant collision damage be "like new?"

Regular pre-owned is often a better bargain

Instead of paying for the perks that you might never use, consider buying something other than a certified pre-owned. Most extended warranties end up costing more than they save and free loaners are available only at specific locations, which means you might be getting locked into a repair facility that costs more than the one you typically use. If you get your own inspection on a vehicle, you can end up paying much less and still have a reliable vehicle.

no industry inspection standard

There isn't a standard across the industry for certified pre-owned vehicles. A vehicle that might fail a certified inspection at one retailer might pass with flying colors at another retailer. All vehicle manufacturers have different certified pre-owned programs. Ford and General Motors programs advertise 172 point inspections. Volkswagen only advertises a 112 point inspection. The inspections almost always come with vehicle history reports, which should never be considered a guarantee of the car's condition.

All used cars will have some degree of wear and tear, but these certified pre-owned programs are guaranteeing that these cars are in the best shape possible. If a vehicle has received a major overhaul, it shouldn't qualify as being in the best possible condition. In the end, you're relying upon someone at the dealership to say that everything on the vehicle meets the standards set by the manufacturer. So if you have tires installed on the vehicle that don't meet the standards, such as not being the proper rating, the personnel doing the inspection might not notice and instead just look at their condition.

Dealerships can be sneaky

Dealerships know that the word "certified" commands a premium price, so they sometimes label a car as certified. They may even have the word "certified" in the "used cars" sign in the lot. But that isn't the same thing as the certified pre-owned programs advertised by manufacturers, which you can only get at a franchised dealer. A Chevrolet dealer, for instance, can't sell a Honda through Honda's certified pre-owned program. But that dealer might 'certify' it, which means it received a basic inspection and reconditioning by the dealer. Make sure to look for the manufacturer's certified pre-owned program logo and know who exactly is standing behind the vehicle's condition.

Get another opinion anyway

Regardless of whether you are looking at a certified pre-owned vehicle or one from a private seller, always get a third-party inspection. It might cost about $100, but these trained professionals can easily spot hidden damage or signs of previous repair. They are also able to give you an assessment of whether there are any potential mechanic issues that could cause you problems. If a seller is hesitant about allowing you to have the vehicle inspected, you should proceed with caution.

No guarantees unless in writing

Just remember that once you sign the paperwork, the car and any problems it currently has or will have in the future become yours. You don't have the right to have any problems repaired free of charge or any right to return the vehicle unless that guarantee is specifically in the contract. Otherwise, your only recourse could be a lawsuit in which you have the burden to prove you were knowingly deceived by the seller.