Certified Pre-Owned

Kia of Irvine: 2017 CPO Dealer of the Year

CARY, N.C.  - 

Auto Remarketing has named its 2017 CPO Dealer of the Year, an award presented by ADESA.

Earning this year’s honors is Kia of Irvine.

For three consecutive years, the California dealership has been the automaker’s top seller of certified pre-owned vehicles nationwide.

And Kia of Irvine might make it four in a row in 2017, the automaker said.

Eric Hardin is the president and general manager of the dealership.

“Eric Hardin and his team have been a leader in the L.A. market promoting the many benefits that the Kia CPO program offers.  They have done an outstanding job covering the entire LA Basin,” said Mike Raumschuh, who is manager of CPO and company vehicles at Kia Motors America.  

“Eric has made sure his sales team remains focused on delivering a great CPO value story to all consumers.  He has done a good job making sure each and every customer has a good understanding of the benefits that come with each CPO vehicle,” Raumschuh said. “They have continued to see their customer loyalty improve as their volume of CPO has.”

Last year, the store moved 1,130 certified units, up from 992 in 2015 and 579 in 2014. In all three of those years, Kia of Irvine was the national and regional CPO sales leader for the company. 

“They’ve got a great product and (within) their CPO program, the warranty is second to none,” Hardin said in a September phone interview, referring to Kia. “And in our area, our customers are seeing the value in it.”

Through August, Hardin said his store’s certified sales are down slightly: “We’re just feeling the market kind of slow down just a little bit,” he said, noting the dip is at most 10 percent.

However, Kia of Irvine could still top the automaker’s CPO sales chart this year for the fourth time in a row, as Raumschuh noted that “it looks like they have a chance to finish number one again in 2017.”

When asked how his store educates the consumer as to the benefits of CPO, Hardin said: “It’s easy, just because it comes with 10-year, 100,000-mile service warranty. It’s hard to argue with, and the price is right.

“Kias are great quality cars, but they’re also … a great value, anyways, brand new. So when you turn it into a CPO, especially for people with their kids, it’s a great way to get them into a nice midsize car that’s pre-owned versus a compact car that’s new,” Hardin said.  

One major factor impacting the CPO market, as a whole, has been the influx of off-lease vehicles, following many years of high new-car lease penetration.

As for Kia of Irvine, “It’s been helping,” Hardin said. “There’s a lot of competition in our market now with all the other dealers getting on board (with) the program, but we get a lot choosier cars now at the auctions and coming off our customer turning their leases in at the end.

“We try to lease them new vehicles when they come in and then try to retail the CPO as quickly as possible,” he said. “It’s been helping a lot, though.”

The CPO Dealer of the Year award will be presented at the Used Car Awards Luncheon, which is sponsored by TradeRev, on Nov. 14 during Used Car Week.

One of the conferences at Used Car Week is one specifically geared toward the retail used-car market: Pre-Owned Con, presented by Equifax. 

It was previously known as the CPO Forum, but has since expanded to include the entire pre-owned car market.

This is the award’s eighth year. Previous winners of CPO Dealer of the Year award include:

2016: Fletcher Jones Motorcars
2015: Bill Luke Chrysler Jeep Dodge & Ram
2014: Hyundai of New Port Richey
2013: Galpin Ford
2012: Longo Toyota
2011: Karl Chevrolet
2010: Paragon Honda/Paragon Acura 

Autotrader names fall's top CPO deals

ATLANTA - 

Just weeks before the holiday season approaches, Autotrader has come out with its top picks for certified pre-owned deals in October. 

That list includes attractive incentives from BMW, such as comprehensive coverage with no mileage limit at the end of the original four-year/50,000-mile warranty that's included on all new BMW models.

"One advantage for shoppers today is that certified pre-owned cars and trucks are lightly used, and they have a long factory-backed warranty for greater peace of mind over a typical used car," Autotrader executive editor Brian Moody said in a news release.

"We also saw more manufacturers provide a couple of options on CPO deals to give customers even more flexibility when it comes to saving on pre-owned vehicles."

Audi's CPO program offers comprehensive protection for up to six years or 100,000 miles from the original sale date. And through the end of the month can get 0.9-percent interest for up to 24 months on all CPO Audi 2014-2016 models.

For October, BMW's CPO program is now touting one year of comprehensive coverage with no mileage limit at the conclusion of the original four-year or 50,000-mile warranty.

Shoppers can also opt to purchase additional years of coverage. Additionally, a new special offer also gives qualified shoppers 0.9-percent interest for up to 24 months on all certified pre-owned 2014 and 2015 BMW models.

Throughout the month, Chevrolet's CPO program offers both powertrain coverage for up to six years or 100,000 miles from the original sale date and bumper-to-bumper coverage for one year or 12,000 miles from the original sale date

This month, GMC is also offering two warranties. Its program currently boasts six years or 100,000 miles of powertrain protection from the original sale date, and bumper-to-bumper coverage for up to one year or 12,000 miles from the original sale date.

Honda's CPO program features a warranty that covers Honda models for up to seven years or 100,000 miles from the original sale date and a bumper-to-bumper warranty for one year or 12,000 miles of coverage from the date of purchase.

Throughout October, Mercedes-Benz is offering one year of coverage, which drivers can extend to up to three years of unlimited-mile protection for a fee. And qualified shoppers interested in a CPO C-Class can get a 3.49-percent interest loan for up to 36 months on all CPO 2014-2016 C-Class models.

Nissan touts two incentives this month. The program is currently offering 1.95-percent interest on all CPO models for up to 36 months, or 3.99-percent for up to 72 months. This month, some shoppers can also get cash back for their next CPO purchase. Nissan’s CPO program is offering up to $450 cash back on certain models.

NIADA picks Wheel’s Automotive as exclusive supplier of CPO point-of-sale tools

ARLINGTON, Texas and NIAGARA FALLS, N.Y. - 

A service provider sporting relationships with nearly 20 automakers now is in place to help independent dealerships retail certified metal.

Wheel’s Automotive Dealer Supplies has been selected by the National Independent Automobile Dealers Association as the exclusive supplier of point-of-sale merchandising, collateral and printing services for the NIADA Certified Pre-Owned program.

Wheel’s Automotive, which also services 19 CPO programs for OEMs and other providers and has some 9,000 dealership clients, can combine all the elements of a successful national CPO program into one phone call or click, according to the company.

The NIADA CPO program now includes Wheel’s print-on-demand and direct-from-manufacturer convenience to furnish NIADA member dealers with the exact customized CPO marketing materials desired.

Print-on-demand means highly customized printed items are delivered practically overnight in most cases to support dealers’ CPO sales and marketing efforts.

“Wheel's Automotive represents best-in-class promotional tools and marketing resources for our CPO program dealerships,” NIADA senior vice president of member services Scott Lilja said. “That allows our member dealers to more effectively compete in the CPO marketplace with new car franchise stores and enhances their ability to differentiate their digital and physical lot inventory, driving increased inventory turn, gross margin and customer loyalty.”

Renee Perri, vice president of Wheel’s Corporate Division and a member of Auto Remarketing’s annual Remarketing & Used-Car Industry’s 40 Under 40, welcomed the opportunity to work with independent dealers.

“Independent dealers are a vital part of the automotive retail industry,” Perri said. “Proper signage and marketing materials can help them merchandise and market CPO inventory with more authority and appeal as they service the transportation needs of a wide variety of consumers.”

For more information, contact Perri at (800) 465-8831, ext. 105, or visit www.wheelsauto.com.

Best-ever 3rd quarter for CPO vehicle sales

CARY, N.C.  - 

With the best third quarter ever and a sales increase of more than 6 percent in September, the certified pre-owned market passed the 2 million unit sales mark for the year.

The market remains ahead of the 2016 pace by one percent, meaning another record year is likely in the works. 

Autodata Corp., which released updated CPO sales figures through nine months on Tuesday,  said there were an estimated 221,902 certified vehicle sales in September, which beat year-ago figures by 6.6 percent.

This capped a record third quarter, where dealers moved 679,367 units.

In addition to besting Q3 2016 figures by 0.5 percent, it was the strongest third quarter on record and the second-best quarter ever for CPO sales,  according to Autodata. 

The best?

The second quarter of 2017, which was 2.1-percent stronger than the most recent period.

With consecutive strong quarters on the books, the CPO market has now tallied 2.02 million sales for the year, which beats the first nine months of 2016 by 1.0 percent.

Looking at September results in more detail, the Big 3 moved 75,477 units for the month (up 14.6 percent) and are relatively steady (up 0.3 percent) with year-ago figures, having sold 696,123 units year-to-date.

Asian brands climbed 2.7 percent in September with 109,125 CPO sales and are steady year-to-date (up 0.4 percent) with 982,621 sales.

European brands moved 37,300 units for the month, which was a 3.4-percent gain. That included a best-ever month by Land Rover, which sold 1,829 CPO vehicles (up 11.7 percent).

Through nine months, European CPO sales are up 4.1 percent at 342,099 units.

 

 

American Honda launches digital checklists for CPO programs

TORRANCE, Calif.  - 

On Monday, American Honda Motor Co. launched digital certification applications for its respective Acura and Honda certified pre-owned vehicle programs.

The “Integrated Certification Engine” is a digital checklist designed to give Honda and Acura dealers a faster, easier and more accurate way to certify vehicles.

The shopper, meanwhile, is able to go online and, for select vehicles, download the 182-point CPO checklist.  

They can be downloaded from AcuraCertified.com, HondaCertified.com and select third-party sites.

Dan Rodriguez, American Honda’s manager of auto remarketing and CPO, said that the Integrated Certification Engine can help drive more peace-of-mind for shoppers of CPO vehicles.

“With an influx of off-lease vehicles returning to market, it’s crucial we provide dealers a technology that will make certification of these highly desirable vehicles faster, easier and more transparent for customers,” he said in a news release.

 

New-car incentives impact CPO’s overall sales pace

DETROIT  - 

Elevated new-vehicle incentives are helping to slow the overall sales pace of certified used cars and trucks, analysts said, but some automakers’ CPO sales are still thriving.

Industrywide sales of certified used cars and trucks in August dipped 1.4 percent to 230,013 but were up 0.3 percent to 1,798,711 units in the first eight months, according to AutoData Corp.

Sluggish new-vehicle sales are pressuring automakers to use incentives to move the metal, analysts said. Liberal incentives can bring new-vehicle transaction prices and especially their monthly payments, very close to certified used-vehicle prices. Certified vehicles typically command a premium to cover costs of reconditioning and factory-backed warranties.

These factors can cause some auto companies and dealers to take their eyes off of certified while they concentrate on new vehicles, analysts said.

Edmunds analyst Ivan Drury said August’s average new-car incentive of $3,377 was up 15.1 percent from August 2016 and the third highest for any month since January 2002.

“Like with (Chevrolet) Silverado, they are advertising something like 17, 18 percent off of MSRP,” Drury said. “When you have things like this it (discourages you) to certify your existing, 2- or 3-year old Silverados. Their prices are getting close to the prices of new trucks.

“It’s kind of bizarre that we have such strong residual values on trucks, and we also have large incentives," he added. 

Whatever the reason, some of the industry’s largest sellers of CPO vehicles are seeing their sales fall this year.

For example, the Toyota division’s CPO sales in August dropped 16.6 percent to 30,380 and slid 11.7 percent to 249,842 in the first eight months.

Toyota expects growth in 2018

In an email response, Scott Heyer, the Toyota division sales operations general manager, said the company will fall short of its sales record of over 400,000 units set in 2016, but expects 2017 to be “one of our best volume years in history. We are forecasting to get back to year-over-year growth in 2018.”

But despite the competition from new vehicle sales, CPO sales in general are still doing well, said Anil Goyal, an analyst at Black Book. “They are maintaining the level that we saw last year, which is high for certified,” Goyal said. “As an industry, we’re seeing certified (equal) about 15 percent of all new sales”

And some auto companies and dealers are confident the strong sales increases they’ve seen this year will continue.

Brian Benstock, vice president of Paragon Honda and Paragon Acura in Woodside, N.Y., predicts that CPO sales will continue to grow, especially for the Honda division.

Honda’s stringent certification guidelines makes the difference, Benstock said.

The company conducts monthly visits to most if not all dealerships to inspect vehicles registered as CPO to make sure dealers are doing the mechanical and cosmetic reconditioning as required, he said.

“Hopefully all dealers understand this puts everybody on a level playing field,” he said.

“We’re now getting customers that are multiple time repeat certified buyers.

In August, the Honda division’s CPO unit sales increased 2.7 percent to 22,896; its sales in the first eight months improved 5.2 percent 176,104.

Sights on sales record

Martin Gleason, senior manager of CPO at the Nissan division expects the company’s CPO sales to exceed 200,000 units this year, which would represent at least a 9-percent increase over last year and break last year’s record.

In August, the Nissan division’s CPO unit sales rose 7.5 percent to 18,596; its sales in the first eight months improved 13.4 percent to 139,079.

Gleason said the company’s consistent support of the program with attractive finance rates, dealership incentives and training, and a push for dealers to list every certified used vehicle for sale online, makes the difference.

“There’s nothing new,” Gleason said. “We’ve had all of these for the past three years.”

Eric Swanson, head of certified pre-owned at Fiat Chrysler Automobiles said FCA’s CPO program drives consumers to its dealerships, and when dealers convert those customers to new vehicles, that’s a good thing.

Swanson said his goal is to capture a chunk of the industry’s annual 40 million plus used-vehicles sales.

First new, then CPO

“What if there is a really great incentive on a new car? Move people over to those cars,” Swanson said. “There are a lot of people buying used cars, and I want them in FCA dealerships buying certified pre-owned cars.”

FCA’s August sales were up 18.4 percent to 22,134 units; its August year-to-date sales were up 13.9 percent to 169,529.

Jose Froehlich, senior manager, certified pre-owned, Hyundai Motor America, in an email response, said the company is seeing increased sales of CPO SUVs, and its future off-lease vehicles mix will better align with customer demand for those vehicles.

“Our CPO program continues to be a great entry point into Hyundai and drives incremental dealer traffic, where consumers may select a certified pre-owned vehicle or, perhaps, a new Hyundai, given the attractive in-market offers currently available,” he said.

Hyundai’s CPO unit sales in August dropped 14.4 percent to 7,140; its August year-to-date sales fell 11.9 percent to 57,958.

CPO share of franchised used-car sales up slightly

SANTA MONICA, Calif.  - 

This year marked the best second quarter ever for the used-car market and the first time there has been more than 10 million used-car sales in Q2, according to Edmunds.

Franchised dealers sold 2.95 million used cars during the quarter, and slightly more of those were certified pre-owned than in the same period of 2017, based on data in the company’s latest Used Vehicle Market Report.

Overall, there were 10.05 million used-vehicle retail sales in the second quarter, a figure that includes sales from dealers and between private parties. That’s a 1.7-percent year-over-year uptick.

Franchised dealers, whose overall used retail sales were up 1.4 percent, sold 693,802 certified vehicles in the quarter, according to Edmunds.

Not only is the CPO sum a 2.3-percent year-over-year gain, but it also represents a bit larger piece of franchised dealers’ used-car operations.

In the second quarter, 23.55 percent of franchised dealer used-car sales were CPO.

In Q2 of 2017, it was 23.34 percent.

CPO results year-to-date 

As for the most recently completed reporting period, certified sales fell 1.4 percent year-over-year in August, but are still on track for another record-breaking year.

That's according to data from Autodata Corp., which said there were 230,013 CPO sales for the month, compared to 233,236 in August 2016.

Certified sales were up 1.3 percent from July, when CPO sales fell 3.2 percent year-over-year

Through eight months, there has been a shade less than 1.8 million CPO sales, which beats the year-ago pace by 0.3 percent, Autodata said.

In August, three brands — Nissan, Jeep and Audi — had their best months ever for certified, according to Autodata. 

 

CPO car sales dip in August, remain ahead year-to-date

CARY, N.C. - 

Certified pre-owned vehicle sales fell 1.4 percent year-over-year in August, but are still on track for another record-breaking year.

According to data from Autodata Corp., there were 230,013 CPO sales for the month, compared to 233,236 in August 2016.

Certified sales were up 1.3 percent from July, when CPO sales fell 3.2 percent year-over-year

Through eight months, there has been a shade less than 1.8 million CPO sales, which beats the year-ago pace by 0.3 percent, Autodata said.

In August, three brands — Nissan, Jeep and Audi — had their best months ever for certified, according to Autodata. 

Domestic brands combined to sell 78,927 CPO units for the month (up 1.9 percent), and they have moved 620,646 for the year (down 1.2 percent).

Asian brands moved 110,157 certified vehicles in August (down 5 percent), with year-to-date numbers at 873,269 (up 0.1 percent).

With 40,929 CPO sales in August, European brands were up 2.7 percent last month. Through eight months, they are up 4.2 percent with 304,796 CPO cars sold.

How North American CPO sales are faring this summer

CARY, N.C. - 

With August drawing to a close on Thursday, certified pre-owned sales results for the month should be rolling in sometime shortly after the Labor Day weekend, if not before.

As a refresher, here’s how the CPO markets in both the U.S. and Canada have fared so far this year, starting with the U.S.

American CPO market up modestly year-to-date

Certified pre-owned vehicle sales in the U.S. fell more than 3 percent in July, but year-to-date numbers still remained slightly ahead of the 2016 pace at month’s end, according to Autodata Corp.

There were 227,045 CPO sales for the month, which was off 3.2 percent year-over-year but up 2.3 percent from June. Through seven months, there have been 1.57 million certified vehicles sold in the U.S., which beats year-ago figures by 0.6 percent, Autodata said.

The daily sales rate in July was 9,082, up from 9,019 in July 2016. Year-to-date, the DSR of 8,862 is also up from year-ago numbers (8,762).

The Big 3 sold 78,782 certified units in July, beating last year’s numbers by 1.9 percent. In seven months, domestics have sold 541,719 CPO units, which is down 1.6 percent year-over-year.

CPO sales for Asian brands were down 7.8 percent in July at 109,827 units sold, with year-to-date sales up 0.9 percent at 763,053 sales.

European brands moved 38,436 certified cars for the month (up 0.8 percent) and 263,874 units year-to-date (up 4.4 percent).

Canadian CPO shows ‘momentum’

Next up, Canada.

When Joel Gregory, the national sales manager for CPO and remarketing at Hyundai Auto Canada, shared his brand's certified pre-owned sales results for July, he said via email: "The momentum continues."

Indeed, it does. 

Not just for Hyundai, where CPO sales climbed nearly 36 percent last month, but for the industry as a whole, as well. 

Hyundai Auto Canada moved 794 certified vehicles for the month, beating last July’s 585 CPO sales. Year-to-date sales of 5,175 are handily beating last year’s pace, when 3,149 CPO units had been sold through July.

It joins several automakers in Canada reporting strong certified pre-owned sales this summer. 

At Mercedes-Benz Canada, the pre-owned division had its strongest July on record in the CPO market. It sold 1,058 CPO units, versus 931 in July 2016. Mercedes has moved 8,027 certified vehicles through seven months of the year, compared to 7,608 CPO units sold through July 2016.

Also notching a record July for certified sales was Volkswagen Canada, which sold 1,683 CPO units, up from 1,287 certified sales in July 2016. Through seven months, VW Canada has sold 9,481 certified vehicles, compared against 9,325 in the year-ago period.

BMW Canada — which reports certified pre-owned and non-certified pre-owned together — said last month was its best July ever on the pre-owned side.

It moved 1,873 pre-owned units, up 21 percent year-over-year. Through seven months, pre-owned sales are up 15 percent at 13,017 units.

Toyota Canada posted 2,664 certified sales for the month, against 2,323 CPO sales in July 2016. Year-to-date sales for the Japanese automaker have reached 18,191 units, up from 14,321 through seven months of 2016.

Volvo Canada sold 183 certified pre-owned vehicles in July, even with a year ago. But through seven months, CPO sales were up 9.7 percent at 1,258 units.

Porsche Cars Canada had 205 CPO sales in July, up from 163 in July 2016. Through seven months, it has sold 1,178 certified vehicles, compared to 1,032 in the same period of 2016. 

4 reasons why Latin America’s used market is ‘transforming’

BUENOS AIRES - 

New research shows the United States is a model for how used vehicles can be a profitable industry growth segment for other places in the world, including the use of certified pre-owned programs.

Strategic consultancy firm Frost & Sullivan cited four reasons why the used-vehicle market in Latin America is “transforming.”

While noting factors common in the U.S. marketplace, Frost & Sullivan projected the total used-vehicle market in Latin America will reach 22.4 million units in 2022, exhibiting a compound annual growth rate of 3.4 percent during 2016 through 2022. The four reasons for that sharp rise include:

—OEM collaboration with franchised dealerships in order to resolve informality and lack of financing, improve their brand image and equity, and increase new unit sales as customers can use their old vehicle as partial payment.

—Deployment of new apps, mostly in Mexico, Brazil and Argentina, which create opportunities for independent dealerships and individuals selling their vehicles.

—Online disruptors partnering with OEMs, dealerships and financiers to create shared value through data such as customer preferences and new-model reselling patterns

—OEM efforts to promote used hybrid and electric vehicles through certified pre-owned programs designed to ease battery life anxiety among buyers.

“The Latin American used-car market is primed for online disruptors that can offer financing, easy and friendly processes, and limited warranties and maintenance plans to differentiate and add value for customers," said Frost & Sullivan mobility industry analyst Hernan Cavarra.

“The focus of these startups will be to remain competitive on pricing by keeping operational costs low,” Cavarra continued. “Taking advantage of the learning curve from similar business models in the U.S. market, online businesses can expect success in the medium to long terms."

Frost & Sullivan also mentioned several innovative players are helping accelerate market growth in peripheral used-vehicle markets like Peru and Mexico that are “informal, unprofessional, and poorly regulated,” and in large markets like Brazil, where oversupply of new models due to an economic crisis and influx of low-cost Chinese units, restrain used-vehicle sales.

For instance:

—KAVAK offers end-to-end buying and selling of second-hand vehicles in Mexico along with the commitment of selling the vehicle offered by individuals within 30 days.

—InstaCarro.com has a disruptive business model that promises to sell any used vehicle in an hour and a half or less to any of more than 1,500 dealers that buy it through an online auction. In its first year of operation, the company reported more than $32 million in revenue.

—Localiza, one of Latin America’s biggest car rental companies, has a used-vehicle division that uses smartphone apps, offers good financing options by taking the customer's used unit as part of the transaction, and provides insurance and regular maintenance services.

—Superbid, which specializes in online auction sales, also offers fleets.

—Nissan Mexico offers almost-new and used vehicle eCommerce through its listing-driven website, and has a 154-checkpoint CPO program, financing, warranty, on-demand maintenance and services features, and original spare parts.

“Government regulations, OEM CPO programs, active participation in the market through franchise dealerships, and startup apps for 100 percent used-car sales processes will build trust among buyers and boost confidence in used cars,” Cavarra said.

See here to access more information regarding this Frost & Sullivan analysis.