With the continuously increasing popularity in certified pre-owned used cars, it is not surprising that used cars with this designation sell more quickly and at a premium price. The less obvious question is do non-manufacturer certified pre-owned programs work for used car buyers.

CNW Market Research has looked into the issue from the perspective of used car dealers and declares the non-manufacturer certified pre-owned programs a success both in terms of how quickly a used car sells and how much of a premium a dealer can command for the vehicle.

Certified pre-owned vehicles are used cars that have gone through an inspection process. They typically have not been in an accident, have clean titles, and are low mileage (usually below 50,000 miles). They also come with warranties covering major components.

There are two types of certified pre-owned used cars: those certified by a manufacturer and only available at dealers who sell their new cars (i.e. Chevrolet) and independent certified pre-owned used cars. The latter are backed by insurance policies sold by third-party vendors and are available at independent used car dealerships not associated with new car dealers. They can be more difficult to redeem when it comes time for work to be done and there can be numerous exclusions. Shop these warranties closely.

In its monthly Retail Automotive Summary for June 2014, CNW reports, "There is little question that automaker Certification programs for used vehicles generally move vehicles off of the dealer lot quicker, but also at a higher price compared to the same vehicles that aren’t certified.

But what about Independent dealers and the non-OEM certification programs? Do they work? The simple answer is “yes.” They cut down on the number of days a vehicles remains on the lot and they generate higher prices than the same make and model that isn’t certified."

CNW digs deeper into the issue. "For franchised new-car dealers who certify some of their used inventory, the premiums in the past 18 months have ranged from $2,400 to $2,900 over same-make non-CPOs. And the number of days on the lot are nearly half as long, generating quicker inventory turnover as well as higher grosses. In CNW’s investigation of Independent Dealers and CPO programs offered through those dealerships, we found that dealers were able to cut the length of time in inventory by around 25 percent to 35 percent with premiums over $600 vs. same product, non-certified.

"Considering Independent dealers work with less pricey vehicles, the Premium amount is proportionately about the same as the OEM Premium for Franchised dealers. Profitable or not? Depending on how closely the dealer watches certification costs, the answer is 81 percent of these CPO units generate higher net profits than that made on a non-CPO vehicle."

Our article "Top 10 Tips for Buying Certified Pre-Owned" can help you decide what you should do when it comes to these vehicles. The article lists the tips as:

1. Most Used Cars Don't Need Certified
2. Make Sure the New Car Warranty Transfer
3. Research Is Your Best Friend
4. Availability of Certified Pre-Owned Used Cars
5. Local Certified Pre-Owned Buyers
6. No Cross Breeding Allowed
7. VW WorldAuto Not a Certified Pre-Owned Program
8. Certified Pre-Owned Can Be a Good Idea
9. Buy the Car You Want, Not the Program
10. Research Your Dealership's Service Department

We won't go over the entire list but here are some salient points from the article. Here is  some advice on when it makes sense to buy a used car vs. a certified pre-owned. "Let's say you do find a nice two- to four-year old used Honda Civic at an Audi dealership that has not been certified. Across town, there is a certified pre-owned Honda Civic for sale that's maybe $1500 more but comes with a warranty. Which should you buy? Are you on the road a lot? Buy the certified pre-owned Honda because it comes with a nationwide warranty. You a homebody? Buy the used Honda Civic from the Audi dealer after getting a pre-purchase inspection."

Also, buy the certified pre-owned used car you want. Don't be swayed by the programs. "By now, almost all certified used car programs are the same. Don't be swayed by how one ranks against another for customer satisfaction. Find a certified pre-owned used car you like that fits your needs and your budget. That's going to be the right certified pre-owned used car for you," the article advises.