The first certified pre-owned vehicle offerings were actually luxury models from Mercedes-Benz in the late 80s, followed by Lexus and Porsche in the early 90s. Jaguar, Cadillac, BMW, Volvo, Saturn, Toyota, and Acura followed suit. Presently, almost all vehicle manufacturers, luxury, economy, and those in between offer a CPO or certified pre-owned vehicle program through licensed car dealerships. The question is, which should you choose, a CPO economy vehicle or CPO luxury vehicle?
CPO Economy Vehicle vs. CPO Luxury Vehicle
In the past, CPO vehicles were considered excellent alternatives to new vehicles, and are typically vehicles with low mileage from lease programs. These vehicles were around two to three years old with a mileage of around 50,000 or lower. Currently, however, there are four to eight-year-old certified pre-owned vehicles with a mileage of approximately 60,000 miles. This goes for both economy and luxury vehicles.
While the savings rate is practically the same, the savings amount is higher with luxury vehicles due to the money you could save on the depreciation, explains one of the most renowned car dealers in Raleigh. Off-brand and smaller vehicles like Mitsubishi, however, depreciate faster than luxury vehicles since the market is ripe for pre-owned luxury vehicles. Likewise, even if you add the incentives provided with new economy vehicles, you could save as much as $3,000 when you purchase a two- to three-year-old vehicle since the savings would come from the depreciation that had been absorbed by the original owner.
For certified pre-owned luxury vehicles, you could save more on depreciation, which is roughly around three times higher than a certified pre-owned economy vehicle since you would be starting from a higher baseline. You could expect to spend between $800 and $1,200 more for a CPO luxury vehicle than the same type of vehicle that’s non-certified since the price is higher due to the added costs of repairs, inspection, and warranty.
However, that extra cost could be offset by your savings of around $2,000 due to depreciation on a luxury CPO vehicle than one that’s not certified since it lacks inspection and repairs, along with more miles that could bring more damage, as well as older parts that would require repairs.
So, CPO Luxury or CPO Economy?
The main thing you have to consider when asking yourself this question is: do you have enough money to purchase a CPO luxury vehicle or is your budget only enough for a CPO economy vehicle? Either way, you will save money in the long run and make sure that you’re getting a pre-owned vehicle that’s already properly inspected, repaired, and comes with a great warranty plan.