Success in certified pre-owned can help dealers generate additional new-car sales, retain service customers and manage excess off-lease inventory, JM&A Group’s Brian Walwyn says in an interview here at the NADA Convention & Expo.
And that, he said, more than makes up for the additional monetary investment dealers have to make in certifying the cars.
But dealers have to get Web traffic viewing their CPO inventory. After all, the “main exposure” to CPO for consumers will happen online, he said.
That’s part of the mission for JM&A Group, where Walwyn is vice president of sales and operations.
The company partners with Kia Motors America on CPO and helped to build its certified pre-owned program; JM&A Group is also the administrator for the Toyota Certified Used Vehicles program at Southeast Toyota Distributors.
JM&A Group also has a relationship with Volvo Car USA. In October, it announced an agreement with Volvo to provide more than 300 Volvo dealers across the US with branded F&I products on new and used cars.
In a news release, JM&A said: “Through Volvo’s branded F&I program known as Volvo Increased Protection (VIP) Plans, JM&A will administer its top-rated F&I products. These will include Vehicle Service Contracts, Prepaid Maintenance, Tire & Wheel Protection and Certified Pre-Owned (CPO) Service Contract.”
Off-lease & additional warranty opportunities
When asked where he sees the biggest opportunities for the company in CPO, Walwyn points to the off-lease inventory expected to hit the market. The 2017 Manheim Used Car Market Report released during NADA projects a record 3.6 million units coming off lease this year, with 4 million-plus expected for 2018.
“What’s great about that is that is, it’s opportunities for CPO,” Walwyn said. “And we know that with all these vehicles coming off lease, the values of the used vehicles tend to go down. So when you actually certify a vehicle … the dealers are making more money on it, $500 to $1,000 more.”
And often, that CPO buyer will make a new-car purchase next time he or she is in market.
Walwyn said close to two-thirds of Kia CPO buyers, for example, will end up buying a new Kia for their next purchase.
He also emphasized the opportunity around wrap service contacts and maintenance plans. The CPO wrap often isn’t necessarily a hard sell. Walwyn said.
“In Kia’s case, we have a 10-year/100,000-mile powertrain warranty. And we can wrap that. So, after you’re covering the powertrain, the additional wrap is not that excessive as far as price,” he said.
Records & top rankings
It was a big year for CPO in 2016 — the sixth straight year of record sales, according to Autodata Corp. — and a big year for JM&A Group’s work in certified.
Southeast Toyota had more than 64,000 CPO sales, making it the No. 1 region for TCUV, Walwyn said.
Southeast Toyota has also notched seven years of growth, with last year being its best year ever for TCUV.
Meanwhile, Kia sold 76,224 certified vehicles in 2016, its best-ever sum, according to Autodata.
Maria Williams, Kia's senior CPO retail support manager, said Kia's certified sales have climbed each year since the program was launched in 2008, and the program is targeting another growth year in 2017.
Editor's note: Story has been updated to include further CPO details for Kia and Southeast Toyota, and updated/corrected further to clarify JM&A relationship with Volvo Car USA.