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Certified used cars

Last updated: April 2012

Most automakers and some dealerships have developed certification systems that are intended to give buyers greater peace of mind when buying a used car. Certified used cars are billed as the cream of the crop, inspected and reconditioned according to stringent guidelines. But they can cost hundreds or thousands of dollars more than noncertified vehicles.

Most programs require that candidates for certification be no more than five years old and have less than 60,000 or 70,000 miles. Manufacturer programs also routinely exclude cars that have a suspicious title history or other serious flaws.

Typically, the dealership screens, inspects, and reconditions the vehicle. The automaker then certifies that the car is sound and gives it a manufacturer-backed warranty. The warranty terms can differ significantly from one brand to another. Some start coverage from the date the car was first sold. Others begin when you buy the certified vehicle.

Certification programs also typically throw in enhancements such as roadside assistance and trip interruption insurance. Since those items are generally available through an auto-club membership or other source, they shouldn’t be a deciding factor.

The term “certified” doesn’t actually mean much. Any used-car dealer can call any car certified. The term has no legal definition and no watchdog agency oversees its use. As a result, you’ll sometimes see a car labeled “certified” that has not undergone any reconditioning. It may carry only a service contract, the cost of which is rolled into the vehicle’s price.

You might also see aftermarket warranty programs that look like a manufacturer’s certification. These “dealer certification” programs are underwritten by warranty companies, which are essentially insurers that sell a program to dealers who then resell it to consumers. Because the quality and terms of such contracts vary widely, it’s especially important to read the fine print carefully. Unscrupulous dealers can mislead car shoppers about the certification status of a given car, so it’s important to be wary.

Don’t assume that a certified car is worth the premium price. If you’re buying a late-model, low-mileage car, you should expect it to be in good condition, anyway. Negotiate the price as you would any other used car.

When considering any certified car, ask the dealer specific questions:

Is the vehicle covered by a manufacturer-certified program or by a third-party plan sold by the dealer? Non-manufacturer plans are wild cards because they can vary greatly in quality.
What does the warranty cover, and for how long? Ask to see a copy of the warranty contract, not just a glossy brochure. Read the fine print.
Is there a deductible? If there is a charge for service, find out how much it is and whether you must pay it for each item serviced or for each service call. Ask about other fees, such as a “diagnostic” fee that’s added to the deductible.
Who provides the service? Ask whether you have to bring the car back to the original dealership for warranty work, or whether any same-brand dealership is fine. Ask what you’re required to do in an emergency.

If you are buying a well-maintained car with a good record of reliability, you aren’t taking much of a risk if you skip the certification route. But the real key for your peace of mind when buying a used vehicle is to have it thoroughly inspected by an independent mechanic.

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