Certified Pre-Owned (CPO) Cars vs Regular Used Cars

Posted on: Jan 23, 2023 | | Written by: HDFC ERGO Team

Certified Pre-Owned (CPO) Cars vs Regular Used Cars

Choosing a used car over a new one makes a lot of sense if you wish to save money, are new to driving, or love a model that has been discontinued. Getting a car insurance policy for a usaed vehicle is also cheaper than for a new one. However, when buying a used car, you must make sure that it is in good condition and worth your money. For that, buying a certified pre-owned (CPO) car from a car company is a wiser move than buying from a private or individual seller. To know why, read on.

• The Concept of Certified Pre-Owned (CPO) Car

Car manufacturers offer a certified pre-owned car program where they buy used cars from existing owners. This can be in exchange for cash or in case the original car owner plans to exchange their car for another model. They then check and fix any problems with the car and place their certification and limited period and scope warranty on it and sell the same through their CPO car network along with allied services like registration transfer and car insurance policy sales.

• Difference between a CPO Car and a non-CPO car

Most people these days tend to prefer certified pre-owned cars because there are a number of advantages as opposed to buying a non-CPO car. A CPO car comes with the backing of a large company, generally the car manufacturer, who has thoroughly checked and analysed the vehicle. They have access to its true service record and inspect and fix any problems that the vehicle may have too. You don’t get any of this when you by a non-CPO car.

• Cost of certified-pre-owned cars

It is a very common misconception that certified pre-owned cars cost more than buying from a direct seller. The fact is that the pricing depends on multiple factors. For instance, in case you buy from a direct seller, if you haggle enough and the seller is in urgent need of cash, you can get the car for cheap. However, it might not be the case always. Also, if you do pay slightly more for a CPO than a non-CPO, it will be worth it since you can rest assured about the quality and performance.

• What makes certified pre-owned cars special

There are many factors that make a certified pre-owned car better than a non-CPO one. First, it is thoroughly inspected by expert mechanics of the manufacturing company. Second, companies do background checks for vehicles in case they are stolen or were involved in accidents. Then, there is also the fact that with a CPO car you get warranty and vehicle registration transfer and car insurance policy all done for you. This peace of mind is truly worth it.

• What you should look for in a CPO program

Certified pre-owned car programs are run by many companies, including almost all car manufacturers currently active in India. However, it is recommended that you look for the following in a good CPO program. The company should:

• Offer warranty on the product they sell, and the longer it is, the better

• Offer a few free services on the vehicle

• Have a large service network

• Have spent a few years in the business

• Offer buy-back service

• Offer services like registration transfer etc.

• Understanding the warranty of a certified preowned vehicle

Ideally, when you buy a certified pre-owned vehicle, you should get warranty equal that of a new car. However, if this is not the case, at least the flowing are must-haves in a warranty:

• At least nine months of warranty, the longer the better

• At least 2 free services, the more the better

• Warranty must be over and above your car insurance policy

• Warranty must be available at any service centre of the network and not limited to a garage

• Leasing a CPO car

Leasing a car provides a number of advantages, including the fact that it has a very low entry cost and you get significant income tax advantage. However, being able to lease a certified-preowned car depends less on the car seller and more on the company that offers the car lease services. Since different companies have different rules in this regard, you should check with the lease provider.

• Car loans for CPO cars

Used car loans are available with many financial institutions in India. And various certified-preowned car companies have tie-ups with these lenders for better service. You can check with the CPO network as to which are the lenders they are associated with. Most have the loan process for a certified pre-owned car integrated in the car sale process, just like when you buy a new car. Depending on loan terms and interest rates, you can also take out a personal loan to buy the CPO car, which will have the car transferred to you free of the hypothecation process.

All in all, if you have the choice of buying your preferred used car directly from the seller as well as from a certified pre-owned car sales company, you should try and go for the latter.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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