Many car owners like the peace of mind of driving a vehicle with warranty protection. With repair costs becoming increasingly expensive, who can blame them? Replacing something as simple as an air conditioning compressor can cost up to $1,200. Getting into more severe work, like swapping out the transmission, can lead to a shop bill approaching $6,000.
One approach to dealing with potential repairs is to buy a new car. However, according to Kelley Blue Book (KBB), the average cost of a factory-fresh vehicle is almost $50,000, so this option isn’t in everyone’s budget. Two alternatives include certified pre-owned (CPO) vehicles and extended car warranties.
Both options offer additional coverage beyond the original factory warranty but have distinct differences. We’ll explain what you need to know about CPO programs and extended warranties, covering features, benefits, and other aspects. This information is essential for making an informed decision about which coverage best suits your needs and budget.
What Is a Certified Pre-Owned (CPO) Warranty?
In simplest terms, a certified pre-owned vehicle (CPO) is a car covered by a manufacturer-backed extended warranty. To qualify for this protection, a CPO car must meet specific criteria set by the automaker. These requirements typically limit the vehicle’s age and mileage on the odometer. Furthermore, the car cannot have been damaged in a serious accident or another incident (like a flood).
Here’s a look at some of the CPO warranty coverage offered by select automotive brands:
| Manufacturer CPO Program | Age/Mileage Requirements | Coverage Terms* |
| BMW Certified | Up to 5 years old/300-60,000 miles | 12-month/12,000-mile bumper-to-bumper warranty |
| Chevrolet Certified | Up to 5 years old/less than 75,000 miles | 12-month/12,000-mile bumper-to-bumper warranty **7-year/100,000-mile powertrain warranty |
| Ford Gold Certified | Up to 6 years old/less than 80,000 miles | 12-month/12,000-mile bumper-to-bumper warranty **7-year/100,000-mile powertrain warranty |
| Ford Blue Certified | Up to 10 years old/less than 150,000 miles | 90-day/4,000-mile bumper-to-bumper warranty |
| HondaTrue Certified | Up to 5 years old/less than 80,000 miles | 24-month/100,000-mile non-powertrain warranty **7-year/100,000-mile powertrain warranty |
| HondaTrue Used | Up to 10 years old/no mileage limit | 100-day/5,000-mile powertrain warranty 100-day/5,000-mile non-powertrain warranty |
| Hyundai Certified | Up to 6 years old/less than 80,000 miles | **5 years/60,000-mile bumper-to-bumper warranty **10-year/100,000-mile powertrain warranty |
| Hyundai Select | Up to 6 years old/80,000-120,000 miles | 90-day/5,000-mile powertrain warranty |
| Mercedes-Benz Certified | Up to 6 years old/less than 75,000 miles | 12-month/12,000-mile bumper-to-bumper warranty |
| Toyota Gold Certified | Up to 6 years old/less than 85,000 miles | 12-month/12,000-mile bumper-to-bumper warranty **7-year/100,000-mile powertrain warranty |
| Toyota Silver Certified | Up to 10 years old/60,000-125,000 miles | 12-month/12,000-mile powertrain warranty |
*Coverage terms may include the balance of the original warranty, depending on the brand and vehicle. **Based on the original service date.
You’ll notice that the best CPO coverage is reserved for newer vehicles, usually driven less than 85,000 miles and no more than five to six years old. Some manufacturers offer protection for older and higher-mileage models but with much-reduced safeguards.
To qualify for CPO coverage, each prospective vehicle must undergo a comprehensive inspection process that examines mechanical, electrical, and cosmetic conditions. Any necessary repairs or reconditioning are completed to bring the car up to the manufacturer’s standards. Assuming the vehicle meets all the requirements, the dealer pays the automaker a fee to activate certified pre-owned coverage.
Pro Tip: Be alert to dealer CPO programs that do not include manufacturer support. Some car dealers will offer private-label CPO programs that are nothing more than repackaged extended warranties. Under these circumstances, buyers may pay more for the same coverage they could have gotten directly through a warranty provider. Be sure to always check the fine print of your contract before signing.
What Does an Extended Warranty Offer?
An extended warranty, also known as a vehicle service contract or auto protection plan, covers repairs after the original factory warranty has expired. Third-party companies like Endurance Warranty Services often provide this coverage, and it can be purchased for a wide range of vehicles. Unlike CPO programs, purchasing an extended warranty doesn’t require going to a dealership to secure coverage. Furthermore, many warranty providers (Endurance included) allow plan holders to use any licensed facility for covered repairs.
Equally important, extended warranties offer more flexibility than CPO programs, allowing for different coverage levels and price points. And, in many cases, the vehicle you’re driving now may be eligible for an extended warranty, meaning there’s no need to go car shopping. So, a car that wouldn’t qualify for a CPO program due to age or mileage may be eligible for extended warranty protection. For instance, Endurance offers coverage for vehicles up to 20 years old with no mileage restrictions.
Extended warranties can be tailored to cover specific systems. You can secure essential protection if you’re only concerned with safeguarding the powertrain (the engine, transmission, and drive axle). There are options for more comprehensive plans, including programs similar to new car bumper-to-bumper warranties.
Comparing Coverage: CPO vs Extended Warranty
Understanding how CPO programs and extended warranties stack up is crucial in determining which direction is best for your needs and budget. Here’s a breakdown of the significant areas.
| Coverage Aspect | CPO Program | Extended Warranty |
| Vehicle Eligibility | For more comprehensive coverage, typically limited to vehicles under six years old with fewer than 85,000 miles. | Available for a broader range of vehicles, including older models and those with higher mileage (150k miles and up). |
| Covered Components | Often mirrors the original factory warranty, focusing on powertrain components like the engine and transmission. Some CPO programs limit coverage for wear-and-tear items. | Customizable coverage ranging from basic powertrain to comprehensive bumper-to-bumper protection. |
| Deductibles | Usually, there is no deductible or a small deductible per visit | Deductible options vary, allowing you to choose a plan that fits your budget. |
| Repair Locations | Repairs must be performed at a dealer of the same brand as your vehicle. | Allows you to choose from a wide network of licensed repair facilities, including car dealerships and independent shops. |
| Additional Benefits | Benefits like roadside assistance and rental car coverage may be included but are not always standard. | Often includes additional perks like roadside assistance, rental car coverage, trip interruption protection, and tire protection. |
| Transferability | CPO warranties are typically transferable to subsequent owners, which can increase the vehicle’s resale value. | Many extended warranties are transferable, but the specifics depend on the provider and plan. |
| Flexibility | Coverage terms are predetermined by the manufacturer, with little room for customization. | Highly customizable, allowing you to choose the coverage level, term length, and additional benefits that best suit your needs and budget. |
Cost Comparison of CPO Programs and Extended Warranties
CPO programs and extended warranties have different pricing structures. CPO protections are built into the price of the vehicle, which translates into a premium over a similar non-certified used car. The price difference will depend on the brand and used vehicle but expect to pay at least a few thousand dollars more than a comparable non-CPO example.
The critical cost consideration with an extended warranty is that you don’t have to buy a vehicle to get coverage. Of course, if you are shopping for a used car, the availability of extended warranty protection means you’re not limited to CPO vehicles. You can buy from an independent dealer or a private seller and add critical coverage against breakdowns and surprise repair bills.
In addition, an extended warranty offers more flexible pricing options due to the availability of customizable coverage. This is not like the one-size-fits-all approach offered by CPO programs. Also, extended warranty customers can pay one lump sum upfront or pay for coverage monthly, making outlays more manageable and car repair costs more predictable.
Certified Pre-Owned Car FAQs
What is the advantage of a certified pre-owned car?
The core benefit of buying a CPO vehicle is that it has undergone a rigorous inspection and reconditioning process according to the manufacturer’s standards. Additionally, certified pre-owned cars have an extended warranty that provides additional protection against repairs.
What are two reasons not to buy an extended warranty?
Two potential reasons to forego an extended warranty are:
- If you plan to keep the vehicle for a short period, the warranty cost may not be justified.
- You’re willing to risk the cost of repairs on your own.
How much does CPO add to value?
A CPO designation can increase a car’s value by at least a few thousand dollars. This premium covers the cost of the inspection, reconditioning, and extended warranty.
Is certified pre-owned an extended warranty?
Yes, certified pre-owned programs extend the new car warranty. Depending on the certified pre-owned warranty, this coverage may carry over the original warranty terms or modify the conditions, such as not covering wear-and-tear items.
The Bottom Line: Extended Warranties Offer Better Protection
Certified pre-owned programs and extended warranties each have their advantages. CPO vehicles are manufacturer-backed but come at a higher cost and with more restrictions. In contrast, extended warranties, particularly protection plans from reputable third-party providers like Endurance, offer more customizable coverage and greater flexibility.
Learn all the benefits of Endurance Warranty. Request a FREE email quote or visit the Endurance online store for instant plan and price information. Personalized help is available by phone – call (800) 253-8203 today!
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