Why Buy Certified Pre Owned Cars if they are more Expensive?

We certainly live in strange times today. Buying used in some cases today, you could end up paying more for your car than you would if you bought new. You can certainly understand how that might be true for a fuel-efficient car like the Prius that's in short supply in the new car market. But why would a massive SUV like the Audi Q5 or the Toyota Venza cost more on the used market than in new car dealerships? Apparently, the left hand doesn't know what the right hand is doing. Higher demand for low priced used cars has sent prices up there. And lower demand in the new car market has resulted in lower prices there. Unfortunately, the two markets aren't speaking to each other that they would know anything about what the other was doing. And as for certified pre-owned cars there are some interesting things going on there as well.

There's a lot to recommend certified pre-owned cars. They go through each used car with a tooth comb and give you a great new car-like warranty. If peace of mind is what you are looking for a car purchase, you couldn't do any better.

The warranty does cost money though. Certified pre-owned cars usually end up costing about $2000 more than regular used cars. Add to that and the fact that used cars are more expensive to finance, and most of the time, there is practically no difference between that and buying a new car. If you wanted to buy a certified pre-owned 2009 Toyota Tundra, you would actually pay $3000 more for it than if you went and bought a new car. One reason this upside down situation exists is that the new car comes with a big cash incentive. But if it weren't for that, the used car would still be more expensive.

There are lots of terrible deals on certified pre-owned cars out there today. All of these cars are great value in reliability and quality. They're just not good value for money when you can get a new car for less.

Consider the Toyota Land Cruiser. These aren't in demand these days. However, since they haven’t been selling well for many years now, there aren't that many on the used car market. And that sends prices up -- even if it makes them even less desirable. What really does it for the used Land Cruiser market is that if you bought a new one, it would only cost you only $1000 more than a two-year-old model. Go figure.

You could say this for all kinds of cars. With the quirky Nissan Cube and the tiny Nissan Versa, if you buy this year’s models, they cost exactly the same as the 2009 models. Depending on market forces sometimes….