Are Certified Pre-Owned Cars Less Valuable Than Ever?

Buying a used car always comes with a bit of a risk. Traditionally, certified pre-owned cars have helped to lessen that risk. Shoppers are able to choose from used cars that have been inspected and approved by professional mechanics and are covered by a warranty. But, that may be changing with new rules about CPO certification and coverage. Are certified pre-owned values less valuable than ever? Let’s take a look at the state of CPO in 2022.

Your dollar doesn’t go as far in 2022

In case you missed it, new-car prices are blindingly high, the average used car has high miles and some more rust than usual, and interest rates have gone up. All of these combine to make it harder than ever to find an affordable used car that’s worth the money. $10,000 or even $20,000 can’t buy you today what it could five years ago.

Buying a certified pre-owned car may give you a leg up. Forbes says it’s a good year to buy, but there are questions as to whether certified pre-owned vehicles are a good value anymore.

Certified pre-owned vehicles will likely be older with higher mileage

Usually, certified pre-owned cars, trucks, SUVs, and EVs have strict age and mileage limits. That means you’d usually find cars younger than four years of age with often less than 36,000 miles. Historically, one of the major benefits of buying a certified pre-owned car was that you’d get a vehicle with few miles.

That may not be the case anymore. Some automakers are certified used cars with 80,000 or 100,000 miles. Some vehicles are only constrained by age and can have any mileage.

Certified pre-owned cars are more expensive than ever

Car and Driver calls this current market “a jolly great time to sell and an awful bad time to buy,” and I’d have to agree. Cars are worth more—and cost more—than they have in the past. This is great if you have something that you’re looking to sell or trade in. But, if you’re looking for your first car, or want to add a new vehicle, you might find yourself frustrated.

Even certified cars are more expensive, partly because of how used cars become certified. First, a dealership has to obtain the vehicle—and those costs have gone up. Then, the vehicle must be fully inspected and any repairs must be made. Parts are harder to find and more expensive to purchase, so those costs have also gone up.

There are a lot of mistakes when buying a certified pre-owned car, but overpaying for a used car is a big one.

Trade-in values are up 72 percent over 2021

Blue Toyota Camry sedan; a Toyota is usually a good certified pre-owned value
Toyota Camry | Toyota

There is some good news. If you have a relatively new vehicle with less than 50,000 miles on the odometer and you’re looking to sell, you’re likely to get near-retail offers for it. Even if you have a slightly older vehicle with 75,000 miles, you may get a lot more for it than you’d think.

CPO vehicles may seem like less of a deal compared to three years ago, but in this market, they still offer value. You’ll get a used car that a dealer’s mechanic has carefully inspected and approved according to a set checklist, and financiers will approve it for lower interest rates on car loans.

Keep your eyes open, and you may still find a unicorn.

RELATED: Buying a Certified Pre-Owned Car Isn’t Always the Smartest Option