Everyone Needs to Know the Differences Between Used and Certified Pre-owned Cars

Posted by Pawan Gupta on November 3rd, 2019

The options for buying second-hand cars are numerous, especially in a market as congested as India. Below the broader category of second hand cars, there sit 2 sub-categories, namely used and certified pre-owned. While most people would think that they are both one and the same, there are quite a few differences between the two. Let's dive deeper and discover the major differences between used and certified pre-owned cars.

Pricing 

One of the biggest distinguishing factors between used cars and certified pre-owned cars is their cost. While a used vehicle will more often than not have a lower price tag, a certified pre-owned one will always cost you more. The reason behind this is that you can negotiate with the owners of used cars to get to the price point you had in mind. Certified pre-owned cars, on the other hand, go through a rigorous 150-point inspection which immediately increases their prices. Unlike certified pre-owned cars, used cars don't come with dealership warranties either which could eventually drive your expenditure up through repairs.

Depreciation 

It is a common fact that all cars depreciate from the moment they leave the dealership. It is estimated that a new car depreciates about 20 percent within the first year of purchase. This means a used car will ultimately cost about 50-60 percent of its original price after 3-4 years. Certified pre-owned cars don't necessarily follow this rule as the cars are normally repaired, inspected, and fine-tuned before they can be displayed for sale. Therefore, even though a pre-owned car is basically a used car, the added touch-ups reduce the depreciation rate significantly.

Condition

When comparing used and certified pre-owned cars, one of the standout differences between them is their condition. Used cars are normally sold by owners who have had the car for more than 3 years. During their ownership, the car could have been subjected to accidents, scratches, dents, repairs, replaced parts, and more. That is why a thorough inspection by a trained mechanic is vital when it comes to buying a used car. Pre-owned vehicles are always in better condition because they are used very lightly with minimal mileage on them. This keeps the engine, brakes, clutch, steering, and other components in almost pristine condition. Pre-owned cars also come with a manufacturer's warranty which ensures that you always get original parts in your car.

Accessibility

As you can imagine, getting your hands on a used car is rather easy - thanks to its increase in demand and popularity. There are hundreds of used car ads online which add to the thousands of used car dealerships across the country. Apart from these sources, you can always gain access to a used car through word-of-mouth.

If you know a person who wants to sell their car, you can always negotiate better and get the best possible deal on it. Now, certified pre-owned cars are a little harder to find - especially if you have a specific model in mind. Pre-owned cars can only be found in authorised dealerships which means you cannot get a second-hand Honda in a Hyundai dealership. The advantage of this is that you can blindly take your car home and not worry about repairs or touch-ups for at least a couple of years.

Does a certified pre-owned car perform better than a used car?

After discussing all the major differences between the two, there is one question that needs answering - is it better to drive a used car or a certified pre-owned one? In reality, both are essentially the same and the performance of each depends on how the previous owners maintained the vehicle.

While pre-owned cars are probably the better option in terms of service and performance, they are almost always more expensive to purchase. The added repairs, detailed and thorough inspections, and lower mileage allow dealerships to pin a higher price tag on the vehicles. Used cars, while definitely the more affordable option, can sometimes have you spending more on repairs.

Now, in terms of performance, distinguishing between a used and the certified pre-owned car is, once again, all based on how the car was used. For instance, a well-maintained 4-year-old used car can perform better than a 2-year-old certified car since the engine is more seasoned.

In the same way, a 1-year-old used car that was not taken care of will perform a lot worse than a 5-year-old certified vehicle. In the end, choosing between a used and certified car depends entirely on what you're looking for, how much you're willing to spend, and the condition of the car itself.

So, after discussing all the differences between certified pre-owned and used cars, purchasing either one not only becomes easier but also helps us make an informed decision based on our requirements. Whether you're looking for used cars in Nagpur or Bengaluru, the basic differences are quite easy to find and distinguish. What is your favoured option when it comes to second-hand cars? Are you comfortable in paying extra for a well maintained certified vehicle or are you better off with the affordable used car option?