In the latest installment of the annual Power 300 issue of Auto Remarketing, we go behind the scenes with some of the leading companies in the used-car space and their top executives with a few Q&A features.

Next up in this series is Tom DeLuise, the national Toyota Certified and Rent A Car sales and operations manager at Toyota Motor Sales, U.S.A.

Auto Remarketing: What are some challenges dealers face in CPO, and how are they working to overcome those challenges?

Tom DeLuise: There are a lot of moving pieces in the car business, and it takes attention to detail to run a successful CPO/used vehicle operation. There are many challenges dealers face with CPO such as availability of vehicles that meet certification requirements. Toyota dealers are mining their lease return portfolio, service drive and are taking advantage of TFS (Toyota Financial Services) online auction sales for vehicle acquisition.

Another challenge for dealers is to get cars in and out and front line ready within two to five days of acquisition. Dealers are constantly working to improve and speed up the reconditioning process. This includes hiring more techs, extended hours and shifts, and additional facility capacity.

(Another challenge is) proper pricing of cars to the market and repricing vehicles at the appropriate time. Many dealers review the market and adjust prices every week. Many Toyota dealers are utilizing inventory tools such as vAuto to remain competitive in the market.

AR: Toyota rolled out CPO leasing in January. How has this been received, and do you predict a significant increase in the program?

TD: Toyota started certified lease training with our dealers in January. Our strategy was to provide the dealer another finance tool to sell TCUV (Toyota Certified Used Vehicles) and was designed to provide the customer another payment option in addition to a traditional retail contract. There are certain vehicles, based on time and mileage, that leasing will work as a viable option for the customer.

Prior to January, our leasing was less than 1 percent. We projected leasing could move into the 5 percent to 8 percent range. We are currently running around 3 percent.

AR: Toyota’s CPO program posted its best sales month of all time in March. (Per Autodata Corp., Toyota moved 38,563 CPO vehicles; this beat year-ago figures by 23.2 percent.) To what do you attribute this great success?

TD: First and foremost, our dealers have truly bought into the value of TCUV and have done a tremendous job in selling that value to our customers. We have stepped up our TCUV training courses over the past two years. The courses are for our sales associates as well as a managers’ class that pulls all the critical players from the dealership into one room to review the “TCUV Value Story.” 

Like all OEMs, we have a steady supply of lease returns that have fueled our growth and will continue to supply our dealers with high-quality inventory. In addition, our partnership with TFS has been invaluable. TFS supports the dealers with products, programs and a commitment to help the dealer sell cars. It’s a team effort and that’s the critical piece that in needed in order to get it done.

AR: What do you see as customers’ top impressions of CPO?

TD: Customers see the value in TCUV. It is peace of mind for them because they know the vehicle is backed by Toyota. Customers are looking for QDR (quality, durability, reliability). Combine that with the 160-point certification process and it helps build value.

Additional pieces from this series can be found below: 

4 questions with AUL's Jimmy Atkinson
Q&A with Jared Rowe
4 questions with Costo Auto Program's Lori Grone
4 questions with Tony Hughes of Moody’s Analytics
4 questions with NABD's Ken Shilson