Certified pre-owned vehicles are used automobiles that have passed a thorough inspection process and have been granted an extended warranted by the vehicle's manufacturer, explains Cars.com. Dealers often tack on extra perks such as lower interest rate loans to provide incentive to buyers of certified pre-owned vehicles.
An officially certified pre-owned vehicle must be inspected and approved by a manufacturer's factory-trained technician, according to Autobytel. The technician performs a 100-point inspection that examines the particular vehicle's body, tires, suspension, frame, gas cap and neck filler. It also certifies the interior, accessories, under the vehicle, engine, transmission and clutch, four-wheel drive, brakes and steering.
Most certified pre-owned vehicles are less than five years old, reports Cars.com. The certified pre-owned process was initiated by manufacturers who wanted to sell off-lease vehicles in the 1980s. The certification process proved lucrative to automotive manufacturers who were trying to sell previously leased vehicles to a broad base of consumers. By providing a manufacturer-backed inspection and extended warranty, dealers were able to better market pre-owned vehicles.
Some dealers try to pass of vehicles as certified when they have had their warranties extended by third-party companies, states Edmunds.com. True certification comes from a manufacturer through its dealer network.