What are “certified pre-owned” or “certified used” vehicles and what are the benefits of having this classification from a dealership? What are the differences between buying a used auto with an extended warranty and a certified used auto? As the popularity of “certified used" and pre-owned vehicles has grown, so has the confusion surrounding exactly what the dealerships are offering consumers. While hearing that a vehicle has a “warranty” or is “certified” might help convince you to buy it, the details can often be misinterpreted and can lead to unexpected expenses after the vehicle is purchased.

For many dealerships “certified used” or “certified pre-owned” vehicles feature warranties that extend beyond the initial coverage of the new auto purchase and are recognized by the original vehicle manufacturer. Before an auto can receive this distinction, the manufacturer conducts what is known as a 100-point inspection, to determine if the vehicle is worth the additional warranty coverage. If the vehicle passes inspection the manufacturer authorizes the “certified” classification and the additional warranty will take effect after the original coverage expires. Often, “certified” buyers enjoy many of the same benefits new auto buyers receive.

Used vehicles that are sold with extended warranties are not factory-certified but have service contracts that were purchased at an additional cost from a third party. Most extended service contracts do not require manufacturer's inspection and repair procedures performed routinely under an authorized “certified” program.

Generally, autos with a “certified” authorization are more expensive than regular “used” vehicles. However, the additional cost is seen as assurance from the dealer that the auto is a solid purchase.