Buying a certified pre-owned car is a good alternative to buying a new car at a time when the customer faces the uncertainty of making a mortgage payment, much less a car payment. But before deciding on a certified pre-owned car, keep in mind the pros and cons of such a decision. The uncertain state of the economy also makes certified pre-owned cars attractive.
Pro: Factory-certified pre-owned means peace of mind; with the inspection, repairs and warranty, you've saved the time and money it would have taken to find and make them yourself.
Con: Though it will save you time, you could probably get those things yourself for less money. Plus, even when a car is certified there's no guarantee it will be trouble-free, so you should still pay the money to have your mechanic inspect it. If something is found, you should be able to get the dealership to make the repair.
Pro: As with any used car, you avoid the high up-front 20-40 percent depreciation cost the original new-car buyer suffered in the first two to three years of ownership.
Con: Though buying certified pre-owned helps avoid new-car depreciation, you'll have to deal with the traditional used-car wear, tear and higher mileage that new-car buyers don't have to put up with.
If you decide that a certified pre-owned car is right for you, here are a couple more things to consider. There are different types of certified cars: there are those that are factory certified and those that are certified by the dealership. Understanding the differences can better help you make your decision.
Factory-certified: A factory-backed warranty means that if you buy a pre-owned Hyundai, you have the same coverage you would if you bought a new car because any Hyundai dealer will make the covered repair.
Dealership: Without the warranty that comes with a factory-certified car, you may choose to buy an extended warranty, which may require you to always return to the same dealer for service or repairs. Also, extended warranties often require deductible payments, not to mention exclusions for any repair considered normal wear and tear.
Factory-certified: Because the factory provides the warranty, it sends out reps on a periodic basis to ensure inspection and repairs have been made.
Dealership: Without a factory warranty, repairs may have been limited to things you can see on the outside, like a crinkled fender, but not inside, like an engine that's about to expire.
Factory-certified: Because of the multipoint inspection, more details will be taken care of. For example, if the brakes have less than 60 percent life left, they have to be replaced.
Other: However, on a non-factory-certified car, if the brakes have less than 60 percent life left, you better hope your extended warranty covers them.
Whichever vehicle you decide to buy, make sure you know what's covered. Get a copy of the warranty terms spelling out what is and isn't covered, what — if any — deductible you must pay, and who does the repairs. Don't settle for a sales brochure stating the "powertrain" is covered. Get a detailed explanation of what the term "powertrain" includes or you could be paying for a major repair yourself.
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