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CPO cars: What are they and how do you buy one?

With a certified pre-owned (CPO) car, you can take advantage of getting a warranty without the hefty price tag of a new car.

If you’re car shopping, you may be deciding between buying a brand new car off the lot or buying a used car. There is some middle ground available with certified pre-owned cars, too. Unlike traditional used cars, certified pre-owned (CPO) cars are only available at authorized dealerships and come with a thorough inspection and manufacturer’s warranty. If you want to find a reliable car but don’t want to pay for a new one, buying a CPO car might be for you. Follow the steps below to get started.

What is a certified pre-owned car?

You may be wondering what does a certified pre-owned car mean? In a nutshell, car manufacturers offer CPO vehicle programs, providing Canadian consumers with the option to buy a used vehicle that’s been carefully inspected and refurbished before it’s put up for sale again. Buyers can purchase a CPO car with the comfort of knowing it’s gone through extensive inspections for safety, quality and meeting specific requirements for age, condition and mileage according to manufacturer guidelines.

These programs also often come with important benefits such as an extended warranty and a roadside assistance program so you can buy a used car with peace of mind. Buying a CPO car from a manufacturer is the closest thing to buying brand new.

Keep in mind, you may find CPO programs organized by car dealerships that are worth checking out too. Dealerships run their own set of benefits for buying a CPO car, such as special financing, and they’ll make sure cars are carefully inspected to meet quality and safety standards as well.

Why buy a CPO car?

Buying a CPO car comes with a string of benefits. They include:

  • Careful inspection and regulations from the manufacturer or dealership. When you buy from a manufacturer or dealership’s CPO program, you can trust that the vehicle you’re buying has been inspected thoroughly and that its age, mileage and condition are taken into consideration before being put up for sale. You can save yourself the step of finding a trustworthy inspector to check on the state of the car you’re thinking of buying. Manufacturers will make all of the necessary repairs to get the car in tip top shape.
  • Benefits, including an extended warranty. While your CPO car has been tested for quality and safety, CPO programs often come with coverage like an extended warranty and roadside assistance to offer you greater peace of mind should you run into any problems with your car.
  • Potential for special financing. Savvy car buyers should always do their comparison shopping by looking for the best auto loan to suit their needs, but you may find your dealership has CPO program special financing to help you purchase your car. While a CPO car is more expensive compared to a non-CPO car, it’s still far cheaper than buying a brand new car off the lot.

Step-by-step guide to shopping for a CPO car

If you think a CPO car is the best option for you, follow these steps to help you find the right car – and price point.

1. Research CPO prices

Certified pre-owned vehicles tend to be more expensive than traditional used cars because of their warranty and refurbishments. When you’re comparing options, check prices on Canadian Black Book or Auto Trader Canada. This can guide you in negotiations at the dealership and help you spot good deals — or overpriced offers that aren’t worth pursuing.

You can compare prices between a brand new car and the car on offer via a CPO program. If you’re curious, you can even consider how CPO pricing stacks up next to a used car that isn’t part of a CPO program.

2. Check dealership and manufacturer inventories

Manufacturers that offer CPO car programs typically have a dedicated page on their website where you can search for cars by model and year in your area. If you don’t find anything you like, check local dealerships – although your options may be slightly more limited. Local dealerships run their own CPO programs with their own set of guidelines on how they inspect and repair their vehicles for CPO status.

Once you visit a lot, have the salesperson verify that the car is involved in a CPO program before you start the purchase process.

3. Read the CPO warranty

No CPO warranty is exactly the same, so check your manufacturer’s website to see what it covers and how long the warranty lasts. Manufacturers may set a CPO warranty based on when you buy the car, while others will allow you to take over the original warranty and extend it for one or two years.

You’ll also want to make sure you understand how coverage works. Some may cover a limited number of components, while others may extend coverage to the powertrain and protect against corrosion.

4. Take a test-drive and visually inspect the car

Like with buying any car, you should take it for a spin before you sign any paperwork. There’s wear and tear no matter how well-maintained the vehicle is, so consider both minor dents and scratches as well as any larger issues you see. A car’s condition can vary widely between manufacturers and even between two of the same model.

5. Request previous inspections and vehicle history reports

Fortunately, you won’t need to take the car in for an inspection with a mechanic since the dealership or manufacturer will have already done this for you. Ask to see the mechanic’s report, which will outline what’s been inspected and the condition most parts are in — and if anything has been replaced.

Similarly, you should also request the vehicle history report if it isn’t supplied automatically. Make sure it’s up to date and take note of any previous damage — it could affect what you might have to repair in the future.

CARFAX Canada provides vehicle history reports – they’re a crucial component of certified pre-owned car programs across the country. Most of the major car companies, such as Acura, Audi, BMW, Kia, Honda, Nissan, Toyota and Volvo, all rely on CARFAX Canada vehicle history reports to help consumers trust in the CPO car they’re buying.

6. Negotiate and purchase the car

The sticker price of your car isn’t final. When you’re ready to make your purchase, don’t forget to negotiate based on the price you want to pay overall, not just the monthly payment. Have the average price of the model on hand so you can use it as leverage for a good deal, and look into how much other dealerships are charging to back up what you’re willing to pay.

Avoid common sales tactics that attempt to get you on the hook for products you don’t need. An extended warranty can seem like a good deal at the time, but weigh the benefits with how much it’ll cost you to ensure it’s worth it. Read through your contract carefully before signing to make sure the salesperson didn’t try to slip in any of these extra products without you noticing.

Compare car loans to buy a CPO car

Name Product Loan Amount Interest Rate Loan Term Min. Credit Score Requirements Table description
CarsFast Car Loans
$500 - $75,000
4.90% - 29.90%
12 - 96 months
300
Min. income of $2,000 /month, 3+ months employed
Get a new or used vehicle delivered to your door.
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs.
Loans Canada Car Loans
$500 - $35,000
0% - 29.99%
3 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Compare rates from multiple lenders.
Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered.
AutoLoanProviders
$7,500 - $85,000
3.99% - 29.99%
12 - 96 months
300
Min. income of $1,800 /month, 1+ months employed
Available in Ontario only.
Apply online and get your new vehicle delivered to your door anywhere in Ontario free of charge. All credit scores considered.
Coast Capital Car Loan
$10,000 - No Max.
Varies
18 - 84 months
650
Able to service debt payment of $300/month
Competitive rates and flexible terms.
Finance new and used vehicles from one of Canada's largest credit unions. No credit union membership required. Available across Canada except SK, QC, NT, NU, YT.
Splash Auto Finance
$10,000 - $50,000
9.90% - 29.90%
24 - 84 months
300
Min. income of $2,200 /month, 3+ months employed
Apply with any credit score.
Get financing for a new or used car. Auto loans for borrowers with fair credit, bad credit, no credit or bankruptcy.
goPeer Car Loan
$1,000 - $25,000
8.00% - 31.00%
36 - 60 months
600
Min. income of $40,000 /year
P2P platform with competitive rates.
Canada's first regulated consumer peer-to-peer lending platform that connects creditworthy Canadians looking for a loan with Canadians looking to invest.
Carloans411 Car Loans
$500 - $50,000
1.90% - 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
High application approval rate.
Get connected with suitable lenders to finance your next car, van or truck. Check eligibility for this loan through LoanConnect.
Canada Auto Finance
$500 - $45,000
4.90% - 29.95%
3 - 96 months
300
Min. income of $1,500 /month, 3+ months employed
Get financing from partnered local lenders.
Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
LoanConnect Car Loans
$500 - $50,000
9.90% - 46.96%
3 - 120 months
550
No min. income requirement
Pre-approval in as little as 60 seconds.
Get access to 25+ lenders through this brokerage. Get your funds in as little as 24 hours.
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Compare up to 4 providers

Bottom line

Buying a certified pre-owned car can be the smart compromise between new and used. Doing some research before you hit the dealership can arm you with the information you need to negotiate a good sticker price. And as with all cars, don’t just settle for dealership financing — compare your car loan options from outside lenders first to ensure you’re getting the best deal possible.

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