Consumers with problem credit get even more help in picking out a vehicle for an auto loan as the NADA now has a certified used car values section on its web site

What you should know

At Auto Credit Express we believe that people with less than perfect credit deserve a second chance. That's why we've spent more than twenty years helping car buyers with problem credit find those franchised new car dealers that can give them their best opportunities for auto loan approvals.

Good used cars

We also know that with the cost of new cars rising every year, most of these applicants that have bad credit will conclude that due to the interest rates these car loans carry it's more affordable to finance a 2 or 3-year-old used car. This decision also makes sense even for many buyers with good credit when you take into consideration the depreciation of most vehicles as well as the current level of vehicle quality.

The next decision buyers must make is choosing between a regular used car and a certified used car.

Certified used cars

Most certified used car programs (known in the industry as Certified Pre Owned or CPO) work this way: if a vehicle meets certain age and mileage requirements, dealers can choose to put it through an inspection process outlined by the manufacturer. Following the replacement of worn, broken or defective parts, these dealers can then sell them with a warranty backed by the manufacturer (in reality a service contract).

Because of the added costs, these certified used cars are then sold at a premium over regular non-certified used cars.


Because of this price differential, shopping for a certified used car often comes down to justifying the increased cost. To make it easier for buyers, Kelley Blue Book has listed separate values for certified and non-certified used cars since 2010. Starting in September of last year, so does NADA.

"We recognize the tremendous effort that manufacturers and new-car dealers have put into developing and raising consumer awareness of CPO programs," said Mike Stanton, vice president and chief operating officer of the NADA Used Car Guide. "Our focus is to improve the accuracy of CPO values through NADA's industry-leading data collection and analysis."

Determining the value of certified used cars is not as simple is it might seem, since the programs and the benefits they offer vary greatly. For example, some manufacturers offer longer warranties and more perks (such as rental cars) than others. So while comparing a CPO Chevrolet to another used Chevrolet is easy, comparing a CPO Chevy to a CPO Ford can be difficult.

So how does NADA do this?

According to September's press release, "NADA estimates the CPO value by analyzing the sales records of both certified and non-certified vehicles. The analysis of the data is based on key drivers, such as vehicle age, individual CPO program requirements of multi-point inspections, depreciation rates, warranty extension, age and mileage."

Manufacturer programs

One thing to keep in mind, though, is that just because a car dealer advertises a vehicle as being certified doesn't necessarily mean that it's through one of these manufacturer-backed programs.

Car buyers, therefore, need to be sure the certified used car they're considering is one that's certified by a manufacturer, not just the dealer. If it isn't, the buyer may be required to pay for any repairs up front and submit the receipts to a warranty company for reimbursement – a much less desirable situation. Also remember that only franchised new car dealers can participate in manufacturer certified programs – they're not available to independent used car dealers such as BHPH car lots.

As we see it

There are plusses and minuses to buying certified used cars, mainly because they can cost hundreds of dollars more than non-certified models.

Because of this, it pays to research the model you're considering. This includes comparing the selling prices of both certified pre-owned vehicles and their non-CPO counterparts (be sure to also price any regular used cars with a comparable service contract from a reputable company).

One more thing: if your car credit is less than perfect we suggest you check us out here at Auto Credit Express where we specialize in helping applicants find those dealers that can give them their best chances for approved auto loans.

So if you're ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.