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Is Buying a Certified Used Car For You?

When is buying a certified used car the right thing for you? To decide, you first need to understand the differences among certified used cars.

Older cars that are traded in when a new one is purchased become part of a dealers used-car fleet and, as a rule, the dealer keeps the good ones and disposes of the bad ones.

For decades, used cars were seen by many consumers as piles of junk looking for a home. To them, used meant abused. Then along came a wise marketing type who sought to change that image by calling used cars pre-driven or pre-owned.

The change made it considerably easier to sell the cars, as car brokers went from selling someone elses trouble to selling someone elses treasure.

The certified used car got an even greater image boost when Mercedes-Benz began selling certified pre-owned luxury cars in the late 80s. For years, consumers had suggested car brokers inspect trade-ins for damage and make repairs before putting them on used-car lots. Dealers, however, said that would be too costly and time-consuming.

Then manufacturers decided the time had come, and automakers came up with the idea of having auto brokers inspect and repair trade-ins before re-selling them, but with an added bonus that made the venture worthwhile — car brokers would inspect and repair the cars out of their own pocket, and the factory would then offer a warranty on these certified used cars.

There are differences among certified used cars. There are certified pre-owned factory-backed programs and certified pre-owned dealer-backed programs. The biggest difference is that factory-backed programs offer a warranty thats backed by the factory at no cost to you, while with car broker-certified programs you usually have to buy an extended warranty from the dealer to ensure coverage.

So why should you consider a certified used car?

Because it gives you another option when buying a car, said Rob Gentile, director of web product management for Consumer Reports. The average price of a new vehicle today is almost $30,000, but a certified pre owned car gives you an alternative option to buying a new vehicle — an affordable way to save money by buying a car thats been inspected, repaired and warranted.

The key to certified used cars is that, unlike other used cars, they have been inspected, repaired and given a factory-backed warranty. The price of the car rises to defray the cost of those perks, but the higher price is offset by the consumers peace of mind.

Auto industry experts estimate that up to 1.6 million of the 17 million used cars sold by dealers each year are factory-certified, and that 20 percent of shoppers who are happy with their used car will buy the same brand when they choose to buy a new car.

Factory-certified has become very popular, said Jerry Cizek, president of the Chicago Automobile Trade Association, which represents more than 500 new- and used-car dealers in the Chicago area. One reason for offering certified pre-owned cars is that its a way for automakers to keep you in their family. If they attract you into a pre-owned car and you're happy, you eventually will buy the same brand when you purchase new, and they are hoping for repeat new-car sales.