Think about a used car and you might think junky, dirty and old. But another market is catching the attention of savvy buyers who want updated rides without paying new-car prices.
These certified used or certified "pre-owned" (CPO) vehicles have been inspected and refurbished by the manufacturer and are backed by extended warranties. The certified used car market isn't one that automakers can afford to ignore. According to a recent J.D. Power and Associates study, sales of certified used cars have increased 46% since 2000. Auto experts estimate that 1.6 million certified used cars are sold annually, a number equivalent to 10% of new vehicle sales.
This rapid growth started when the segment emerged in the 1990s. Luxury automakers like Mercedes-Benz, BMW and Lexus, looking for ways to unload vehicles coming off lease programs, introduced the certified pre-owned programs as a way to attract the discerning buyer who wanted a luxury car but didn't want to shell out the big bucks. Other luxury and non-luxury automakers who found themselves in similar situations began offering their versions of these programs.
Smart car buyers like them, too. Now, with the best-and-worst list of certified used cars from Forbes.com, smart buyers can be even smarter about this growing market segment.
Kelley Blue Book experts say new vehicle prices average $35,000 and depreciate at a rate of about 20% a year. With this in mind, the cost involved with the inspection, refurbishment and warranty of a certified pre-owned vehicle may add up to a better purchase package than buying a brand new car.
"CPO cars are selected from the best of the best," says Micah Muzio, video road-test editor of Kelley Blue Book. "Auto makers can sell them for a premium, usually about $3,000 more than a used (non-certified) car. But the customer gets peace of mind, because the vehicle has been inspected and it's backed by an extended warranty."
But don't rush out and purchase or lease just any vehicle wearing a CPO badge. The programs vary by automaker--and the quality of the vehicles is just as diverse. We looked at a combination of measures to find the best and worst certified used cars on the market, including Consumer Reports' used-car verdict scores, the Insurance Institute for Highway Safety for crash test ratings and manufacturer-backed warranty programs.
Topping our list of the Best CPO vehicles are the Honda Accord, Toyota 4Runner, Acura TL, Subaru Impreza and Lexus GS.
Making our list of the Worst CPO vehicles are the Saturn Relay, Jeep Grand Cherokee, Pontiac G6, Volkswagen New Beetle and Mercedes-Benz E Class.
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