What Makes a Used Car "Certified"?

Used cars were once the province of the somewhat shady lot on the corner lit with the bare electric bulbs, populated by guys in bad suits. Consumers who bought from such locations knew they were taking a risk and, for better or worse, they lived with it.

But that was then. These days, used vehicles are big business, and giant, publicly traded corporations and the vehicle manufacturers themselves are playing in what has become a much larger, more competitive game. One of the many results of this intense competitive pressure is the phenomenon known as the Certified Pre-Owned vehicle or CPO car. Some have heralded the Certified Pre-Owned vehicle as a boon for the consumer. After all, such vehicles most often feature a lengthy service contract to accompany the fact that they have been heavily inspected by reputable mechanics. But lately there has been some question over the term "certified." Far from a boon, some consumer advocates claim that buyers are often being overcharged for otherwise ordinary used cars simply because they bear the largely nebulous title "certified."

You've heard of the old phrase: "Figures can't lie, but liars can figure." Well, these days, that might be accompanied by the phrase "Certifications can't lie, but liars can certify." There is no standard, government-accepted definition of the word "certified" like there is for, say, the word "peanut butter," and thus anybody who can fog a mirror or print a page off his computer can "certify" a vehicle. That certification is only as good as the person or entity certifying it. For instance, the courts have seen actions against Ford and Chrysler that take to task their certification rules and, in particular, the administration of those rules by individual dealerships that represent their respective brands. Suits against some manufacturers have claimed that, through their dealers, they are selling used rental cars, which presumably get harder service than privately owned cars --and even crash-damaged cars -- as "certified." This, so the reasoning of the lawsuits goes, dupes the consumer who feels he or she is getting a "pick-of-the-litter" used vehicle when purchasing a "certified" car.  

It is easy to grasp the issue when one realizes that the typical "certified" used vehicle frequently commands $1,000 more than its non-certified near-twin. Buyers presume that the certified vehicles have passed a rigorous inspection, have lower-than-average miles on them and are backed by new-car-like warranty coverage, but questions have been raised about all three aspects of this assumption. First, there are nagging questions about how thorough the inspection actually is, since the ability to certify the car might mean an additional $1,000 in revenue to the inspecting organization. Second, there are no strict industry standards for what constitutes low-mileage. And finally, the actual warranty coverage varies widely. Some auto manufacturers provide warranty coverage that virtually mimics their new-car coverage, while others offer significantly less protection. Then there are individual dealerships who "certify" vehicles themselves. As you might guess, this represents a mixed bag of good and bad.

So should you pay more for a CPO vehicle? Yes, you should, if you are satisfied that the value and peace of mind provided by the added benefits of such a vehicle are worth the added cost. Don't think every CPO program is created equal because there are wide discrepancies between them. Be sure to do your research on the exact criteria for determining which vehicles qualify for certified status, then read the fine print on the warranty coverage to determine what is covered and what isn't. Certified used vehicles can be excellent values, but the word "certified" is not a silver bullet that can prevent all downside risk.

Driving Today Contributing Editor Tom Ripley writes about the international auto industry and the universal human condition from his home in Villeperce, France.