Certified Pre-Owned Cars: Is 2023 a Good Year to Buy Them?
Buying a car can be stressful enough, but deciding between a new and a certified pre-owned (CPO) model can add to the headaches as you figure out which is best for you. A few short years ago, those on a budget tended to go with used cars because it could save them money. However, that’s no longer the case in this post-pandemic world, and you may spend less by buying a new vehicle.
Is 2023 a good year to buy a certified pre-owned car?
For those interested in a CPO vehicle, 2022 was a fantastic year to buy one. Even though used car prices increased at a painful rate in 2020 and 2021, prices dropped 8.8% in 2022, according to Forbes. While this may have seemed like good news for 2023, it appears this was a brief respite before prices began to rise once more.
All the progress we made last year toward decreasing the price of CPO models has been lost, since prices rose 8.6% in the first quarter of 2023. Predictions that used car prices would fall by 4.0% have been dashed and are now expected to increase by 1.6%. Because of this, 2023 is not a good time to buy a CPO vehicle.
Even though this is not the ideal time to buy a used car, there are some holidays when you can save money. Black Friday is the perfect time to buy a CPO car, as well as other holidays like Christmas or Memorial Day.
Why do certified pre-owned cars cost more than new vehicles?
It doesn’t make sense that used cars are selling for more than new ones. When you consider depreciation, added mileage, and any repairs, it seems clear that new vehicles should cost more. However, there are two significant reasons it doesn’t work out this way: demand and a lack of inventory.
Many popular vehicles on the market that are in high demand, like the Ford Bronco, aren’t readily available. Many potential buyers visit their local dealerships to purchase one, only to find no Broncos on the lot. If they order one, it could be months before they get one.
A lack of new vehicle availability can be very frustrating for buyers. However, the dealer might have some CPO models on their lot. Even though they cost more, some consumers who need a vehicle now are willing to pay. In some cases, Forbes reports this can be as much as 12.3% more than a new Ford Maverick, or $4,038.
CPO vehicles get another price bump because many are still under warranty, have lower mileage, and come with extra perks. Because of this, the demand for used vehicles has gone up, which can increase the cost even more. If you are selling a used car, this is a great time to do so. For those buying a CPO vehicle, you’re better off waiting for a deal.
Are certified pre-owned warranties worth it?
If you’re questioning whether you ought to get a warranty on a CPO vehicle, the answer is yes. It is the same as a new vehicle and will save you money on repairs for things like engine and transmission repairs.
The warranty won’t last as long as a new vehicle warranty would, but it definitely helps. Most CPO warranties will include a bumper-to-bumper and powertrain warranty in addition to roadside assistance and trip interruption coverage.
However, this may be different depending on the dealer you get it from. You may be able to negotiate this with your dealer when you purchase. Just make sure you do so before you sign on the dotted line.
