What is a certified pre-owned car?

Singapore is the most expensive place in the world to own a car. But it seems that no matter how high the prices get, (e.g $100k COE in 2012), we Singaporeans simply cannot stop buying cars.

But if you’re a financially prudent buyer, you may consider getting a used car because you hate the thought of having to tank the depreciation of the car in its first few years on the roads. But for some reason, you don’t really trust used car dealers. And I understand, especially since car dealers get a high number of complaints from consumers, according to case.

If so, worry not - I hope I can convince you to change your mind, with Certified Pre-Owned Vehicles.

Many consumers are afraid of buying a car with a mysterious past, which is why automakers created the “certified pre-owned” designation.

What exactly is a Certified Pre-Owned Vehicle?

Certified Pre-Owned (CPO) Vehicles are vehicles that are typically new, have low mileage, cleaner and have dealer’s warranty.

CPO vehicles are usually late-model cars that are only a few years old, with low mileage and no record of significant damage. The cars undergo a detailed, multi-point inspection and reconditioning process. They also come with a manufacturer-backed warranty.

Often, these programs feature a long list of extras, including free maintenance, free roadside assistance, and a complimentary loaner vehicle. Finally, dealers regularly offer low financing rates or special deals on CPO vehicles, much like you’d find on a new car.

In essence, you can get a pretty new car (3 to 4 years old) which has been thoroughly checked by the Authorised Dealer (AD) for a peace of mind.

BUT - this does mean that you are paying more for the same car. Yes, CPO cars are usually abit more expensive as compared to the same car from a regular car dealer, as ADs have more overheads, and they have supposedly put in more work into checking the car and ensuring its in showroom condition.

Should you buy a CPO car in Singapore?

Dealers tout CPO cars as the better choice because of their extended warranty, near-mint condition, and cost savings over buying new.

For price conscious buyers, instead of paying a premium for a certified used car, you can save the money and get a used car from a regular dealer (non-AD), and use the cost savings to cover any repairs that might crop up.

With a CPO, you’re paying more upfront for the inspection, warranty, and various extras in the hope that you won’t have to sink money into the vehicle later.

To summarise, the pros of buying a CPO car are :

  • Good condition vehicles (since they are low mileage, late-model cars)

  • Have undergone a thorough inspection

  • Warranty provided

  • Low Interest Financing

  • Free Maintenance for a certain period/mileage (varies depending on dealer)

Cons of buying a CPO car :

  • Higher price

  • Limited selection of cars

  • If you’re looking for an older car, CPO is not for you

However, there’s no way to forecast what may happen after the warranty expires, or how much repairs may cost.

Before buying any used car, as usual it is always better to have it inspected by a trusted independent mechanic who can confirm that the car is in good condition and that there are no issues (e.g car has been in an accident, parts replaced with poor quality ones, failing components etc.)

Just because the dealer says it’s undergone a ‘160 point check’ doesn’t mean you can take their word for it. Spend a bit more to get it checked just to have a better peace of mind, for a better car ownership experience.

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