Extended Warranties Vs. Certified Used Car Programs

Extended Warranties Vs. Certified Used Car Programs

People often wonder what the difference is between buying a certified used car and buying a used car with an extended warranty.

Certified Used Vehicles

When buying a certified used car, you are really getting value in two ways. First of all, you are buying a car that has been thoroughly inspected (assuming that all the inspections promised in the program have been properly carried out). Beyond that, if the vehicle breaks down while it is still under the warranty that comes in the program, it will be repaired free of charge.

To put this another way, a certified used car is one that has been lightly used, thoroughly inspected (and repaired if necessary) and then covered by an extended warranty. Additionally, some certified programs offer roadside assistance where a tow truck will be dispatched to assist you wherever you have broken down. All of these benefits are purchased for one price — in other words, you negotiate and buy a certified used car for one price rather than the cost of the car and the cost of the warranty.

Used Cars With Extended Warranties

It is certainly possible to shop for a good used car and then simply buy an extended warranty to cover it in the event of a mechanical breakdown. To some degree, however, this complicates the process. First, the condition of the car is something of an unknown. This means your inspection of the vehicle is particularly important.

Later, as you negotiate to buy a used car, you also have to negotiate the cost of the extended warranty. These warranties are high-profit items for the dealer and it's difficult for the average consumer to know what to pay for one. Finally, the warranty might not be as comprehensive as the coverage available through a certified used vehicle program.

Another Alternative

In some cases, it is possible to select a used car you want to purchase from a dealer's lot and ask the dealer to include it in its certified used vehicle program. Oftentimes, this will be done for a specific fee. Remember to ask to see the results of the inspection report and follow the other tips in our article, "How to Buy a Certified Pre-Owned Vehicle."



  • LINCOLN DOES NOT BACK THE CPO program. My Great Grandfather had one of the first Ford dealerships in this country and I am ashamed of how Lincoln can sell a CPO vehicle and then not back it AT ALL.

  • ae1606 ae1606 Posts:

    Warning to BMW buyers: BMW has thrown in the towel on their vehicles as credible long-term products. Go to this link from their website http://www.bmwusa.com/Standard/Content/CPO/Warranty.aspx , look about half way down to "See what is not covered for CPO vehicles retailed on or after 1/1/2014". The "not covered" list includes things like door locks, sunroof, electronics, bushings, struts, tie-rods, headlights, door handles, water leaks (not a joke), mounts (as in transmission and engine mounts, not a joke), light bulbs, interior dashboards (not a joke) and on and on. If your dash-board goes dark and it's not covered, what's the point behind "CPO" again? Seems kind of important. What's worse, BMW used to sell policies for $1,500-$3,000 allowing you to upgrade their CPO "warranty" effectively to bumper-to-bumper coverage. They no longer do this. Some dealers try and get around it by working with third party insurers but the prices are staggering and that's because these are PRECISELY the things that often fail on BMWs inside 60k-70k miles. I've owned 5 BMWs, have LOVED driving them, love the cars but have had chronic quality problems with all but one of them. Wonderful cars to drive but the changes to the CPO warranty and the lack of supplemental policies seems to be a clear flag that declining BMW quality makes these vehicles more toys for enjoyment rather than also being reliable vehicles for transportation.

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