How Much Can You Negotiate Off A Certified Pre-Owned Car?
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Certified pre-owned (CPO) cars offer an ideal middle ground for auto shoppers. It’s a new-ish vehicle without the new car price and comes with a factory-backed warranty. Let’s explore CPO essentials and find out how much can you negotiate off a certified pre-owned car.
What Is a Certified Pre-Owned Car?
Before going further, let’s review what makes a certified pre-owned car. A CPO program provides extended warranty coverage for an automaker’s pre-owned vehicles that have passed an inspection process. CPO programs are brand specific. So, a BMW, for example, can only be certified by an authorized BMW dealer. In other words, BMW can’t certify an Audi.
A CPO vehicle must also meet specific manufacturer requirements for:
- Vehicle history
- Mileage
- Age
For instance, BMW’s CPO vehicles must be accident-free, have a clean title, be less than six years old, and have few than 60,000 miles. Dealers source these cars from lease returns, auctions, trade-ins, and service loaners.
Each manufacturer requires the certifying dealer to perform a multi-step inspection that assesses safety, appearance, and operating conditions. Any necessary repairs are made to meet the requirements. Assuming an inspected car passes muster, the dealer pays the manufacturer a fee for the CPO coverage.
CPO warranties vary greatly by brand. Ford’s coverage adds 12 months or 12,000 miles to the original warranty, while Acura adds two years (with a total 100,00-mile cap) to its plan. It’s important to note that official CPO coverage can only come from a manufacturer, Independent dealers may sell “certified” vehicles, but the warranty has nothing to do with an automaker.
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Identify Needs and Preferences
Car shopping, especially for a CPO vehicle, is best approached by first identifying must-have features and equipment. Dreams of a sleek sports car may be fantastic, but these thoughts will do little good if you require a fuel-efficient vehicle with room for the whole family. Before doing a deep dive with research, take a few moments to assess how you’ll use the car and determine mandatory gear.
- Budget: Figuring out how much to spend on a new car will ground your search in reality
- Style: Choosing a less popular body style (like a sedan instead of an SUV) may increase vehicle choices.
- Capacity: Determining regular passenger and cargo loads ahead can avoid a costly mistake down the road.
- Equipment: Identify what features (or lack of) are deal breakers, like automatic emergency braking or adaptive cruise control.
- Mileage: Understand that a CPO car is a used vehicle. So, be aware of the current mileage and how your planned usage may impact warranty expiration.
- Fuel Economy: Incorporate a CPO car’s fuel economy in the budget before buying.
- Longevity: Ask yourself how long you intend on keeping this car. A shorter ownership period could mean some requirements may be less important.
Why should you consider these things in advance? Unlike with new cars, where models may be available with exact configurations, there’s a limited supply of CPO options that may not fully meet your preferences. Getting a handle on acceptable trade-offs can minimize aggravation during the shopping process.
Differences Among Certified Pre-Owned Plans
If your shopping involves just one brand, understanding that automaker’s CPO offering is straightforward. But, looking across multiple brands requires some research; not all programs are equal. As a general rule, a CPO program will add one to two years of additional coverage. This protection is in addition to any remaining warranty coverage and may have mile restrictions.
For instance, a decision between a 2019 Mercedes-Benz C300 and a 2019 Lexus ES 350 (both CPO vehicles) may come down to the extended warranty. Mercedes adds one year of extra coverage, and Lexus provides an additional two years of protection.
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How Much Can You Negotiate Off A Certified Pre-Owned Car?
It’s a valid question, “How much can you negotiate off a certified pre-owned car?” However, there’s no exact answer. Any discounts result from how quickly the dealer wants to move the car, how desirable and unique the vehicle is, and if you’re shopping in a competitive market.
Of course, it never hurts to ask. The dealer may accept your offer or come back with a counter. But, it’s always good to ground your request in reality. Is another dealer selling a similar car for less? Or is there a competitive car (from another brand) offered at a lower price? During negotiations, presenting this information makes your offer credible and signals that you may take your business elsewhere.
In addition, look for other areas to negotiate. Begin by getting pre-approved for financing before visiting the dealer. With a financing offer in hand, ask the dealer to match the loan terms. But then ask for something else. Perhaps it’s a price reduction on the car or some extra like window tinting. The dealer makes money when it finances a vehicle (not when the customer uses a third-party lender). So, don’t hesitate to dip into this pool of profit.
Be sure NOT to include any trade-in into the negotiation. Concentrate on the selling price first and then work on the trade-in (uncover your car’s value before visiting the dealership). Better yet, tell the dealer there is no trade-in (you can always change your mind later).
Expand Your Horizons
Sometimes, how much you can negotiate off a certified pre-owned car involves extra work. In other words, don’t hesitate to extend your shopping beyond the local area. A trip across town or across the state may uncover a more flexible dealer on price. The best deal may be hundreds or thousands of miles away in some instances. We live in an era of virtual car shopping, so technology can help find a bargain.
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Buying A Car In A Challenging Market
For the past two years, the used car scene has been a seller’s market. It’s a situation arising from the pandemic, supply chain issues, and red-hot demand for new and second-hand cars. These factors can make negotiating a car purchase challenging, especially for highly sought-after CPO vehicles.
The best way to tackle the current market is with persistence and flexibility. Keep shopping if you don’t find what you want at the price you wish (but be realistic). As mentioned earlier, try different dealers. And being flexible about the brand, body style, equipment, and even color can open up opportunities.
Get a Curated List of the Best Used Cars Near You
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