Certified Pre-Owned

US News names Best CPO Program


U.S. News & World Report announced its inaugural Best Certified Pre-Owned Program winner on Tuesday, recognizing the automaker that best provides peace-of-mind for CPO buyers.

Winning the award in its debut year is Lexus.

U.S. News & World Report will also recognize Lexus during the Used Car Awards luncheon, sponsored by TradeRev, this coming Tuesday at Used Car Week.

In a news release, U.S. News pointed to Lexus’ lengthy CPO warranty (which includes up to two years of coverage with no mileage limit or deductible), strong certified pre-owned benefits and its used-dependability as primary reasons the brand won.

Other CPO benefits include free roadside assistance and a free loaner car. Additionally, Lexus CPO owners can utilize four complimentary factory maintenance service visits, so long as they use them within the first two years/20,000 miles of owning the car.  

“The certified pre-owned program from Lexus gives consumers confidence across the board,” said Jamie Page Deaton, managing editor of U.S. News Best Cars, in a news release. “The warranty coverage and program perks are excellent, and Lexus' record of dependability means that consumers may never need to use it.” 

Study: Brand loyalty, growing mass market interest give rise to luxury segment sales

CARY, N.C. - 

Luxury sales have steadily grown over the past three years due to the segment’s consistent owner loyalty and growing appeal among mass market vehicle owners, according to recent data from Jumpstart Media.

The luxury segment currently accounts for 13 percent of total sales, up 3 percent from 2014, shows the company’s latest auto shopper study in collaboration with Ipsos Connect, “Today’s Luxury Auto Owners: How Emotion, Experience, And Loyalty Drive Purchase Decisions.”

At 36 percent, a larger number of mass market owners say that they are interested in upgrading to a luxury vehicle.

Across Jumpstart sites, 34 percent of shoppers are researching luxury vehicles, up 4 percent from 2014, according to the company.

With the addition of more entry-level options offered at lower prices, a number of luxury brands have become more accessible to mass market owners in recent years, says Jumpstart senior web analyst Brian Miller.

“You’re seeing a lot more entry-level luxury options from traditional high-end brands such as BMW with its 1-Series, as well as Mercedes-Benz, Lexus and even Audi. Each of these brands realize the competitive forces being brought from mass-market producers and have focused significantly in competing for the entry-luxury shopper’s interest. I think the CLA-Class and A3 are the biggest examples,” Miller explained in an email interview with Auto Remarketing.

The amount of CPO options available today can be a draw for many of today’s mass market owners as well, according to Miller.

“The rise in luxury has certainly played a large role in the rise of CPO choices over the last few years. This, combined with the fact that a third of all vehicles have been leased in a very hot auto market now for several years, with luxury defining much of the leased market, means CPO has a lot of luxury choices today, and will for years to come,” he said.

Miller also acknowledges that maintenance costs associated with luxury vehicles can bring anxiety to both prospective and current owners.

The study found that 56 percent of mass market owners purchase a non-luxury car as their primary vehicle due to cost of ownership, and 41 percent of luxury owners spent more on maintenance than they expected.

“On average, maintenance cost in the past year has been two times greater among luxury owners versus mass market,” Miller said.

“The point here is that more so in the luxury market than the mainstream market, maintenance costs are a huge concern. It not only keeps people out of the segment, but is a huge pain point for those who currently own luxury. We heard in the qualitative that CPO helps bring peace of mind, so we do feel that the proliferation of CPO can be attributed to luxury.”

Because of price and value, Miller points out that non-luxury choices fitted with advanced technology and features have also appealed to consumers in recent years.
“The traditional luxury brands will always carry with them a healthy amount of fans due to brand loyalty. No doubt, these brands have worked hard over the years to build this loyalty, and the quality in their vehicles is among the most evident reasons why. That being said, there are a growing number of auto shoppers on the fringe that are just as interested in price and value, as much as they are interested in luxury features. This group will continue to explore choices produced by mass-market manufacturers.

When asked, “Which of the following attributes best describes luxury to you?,” nearly twice as many owners defined luxury as quality versus innovation.

Sixty-eight percent of luxury owners stated “quality”, while only 36 percent said “innovation.”

Among non-luxury owners, 93 percent listed “excellent quality” as a must-have for a luxury vehicle purchase, according to Jumpstart.

To capitalize on growing mass market interest in luxury, Miller said marketers should concentrate on promoting quality brand experience.

“Based on what we found in the latest joint report with Ipsos, auto marketers must focus on a quality brand experience in order to capture the interest and loyalty of today’s luxury shopper,” he said. “Gone are the days of retaining a customer just on brand alone.

“Marketers that successfully grow share in luxury will offer the right experience that includes service and maintenance options, and they will focus on demographics, cultures and age groups outside of yesterday’s perception of more established shoppers by age,” Miller continued.

Additionally, the study found that luxury owners are more likely to be self-employed, and 69 percent are likely to use their vehicles primarily for their personal business.

A large portion of luxury owners are younger today as well; 34 percent are between the ages of 25 and 34, according to the study.

How CPO sales fared in October


Certified pre-owned vehicle sales were down 3.3 percent in October, but the year-to-date pace is still on par with the record figures from a year ago.

According to Autodata Corp., there were 200,240 CPO sales for the month, compared to 207,105 certified sales in October 2016.

However, the 2.22 million certified sales through 10 months of the year is up 0.6 percent from the tally from the same period of 2016.

Additionally, Autodata said, the daily sales rate for October was at 8,010, up 0.6 percent from last October’s pace.Similarly, the year-to-date DSR of 8,710 is also up 0.6 percent. 

The Big 3 sold 68,203 certified vehicles in October and were up 3.6 percent, with yearly figures reaching 764,326 units (up 0.6 percent).

Asian-brand CPO sales of 98,239 units were down 6.8 percent year-over-year in October; the year-to-date decline was slight at 0.3 percent, with CPO sales reaching 1.08 million.

European brands posted 33,798 CPO sales in October (down 5.8 percent). Their numbers have climbed 3.1 percent year-to-date with 375,903 certified sales.


Acura presents redesigned CPO site with new alert, sharing features

TORRANCE, Calif. - 

Acura has introduced a revamped certified pre-owned vehicle website, AcuraCertified.com.

The new completely redesigned site built to simplify the online CPO vehicle shopping process allows shoppers to compare vehicles and easily share their selections online, Acura announced Wednesday.

"With the booming growth in Acura Certified Pre-Owned sales and tremendous increase in online and mobile vehicle shopping, we are relaunching the Acura CPO site to offer users a more seamless and interactive experience," American Honda manager of auto remarketing, certified pre-owned Dan Rodriguez said in a news release.

"Based on input we received from our customers and dealers, we've reengineered our Acura site to make comparisons simple, and help shoppers make the best choice for a used vehicle."

In addition to a new vehicle alert feature for the most up-to-date vehicle availability, the new site now includes both a vehicle recommendations tool and an interactive payment calculator.

Two other key features on the new site include inventory alerts, where shoppers can create an alert to be notified when a particular vehicle is available and vehicle shareability, which allows visitors to share information about vehicles they are interested in with friends and family.

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


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


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


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.