As part of our annual special issue honoring The Best CPO Dealers in the USA, Auto Remarketing shared the respective top 10 certified pre-owned sales leaders for a wide array of automakers.
In addition to the lists of CPO leaders, which were based on full-year 2017 sales, we also connected with many of these dealers and asked them about the strategies that made them so successful in the CPO market during 2017.
Part I of their responses can be found below:
What features of Audi certified pre-owned vehicles resonate best with buyers in your market?
“Clients like knowing the vehicle has been through a comprehensive inspection and comes with an additional two years of warranty on top of the factory warranty.” — Joey Morea, certified pre-owned sales director, Audi Atlanta.
How does retailing a certified pre-owned vehicle create opportunities for your finance department to generate additional gross?
“Selling certified pre-owned units allows the finance department to sell wrap warranties. These warranties have longer term benefits to the customer, while adding value to the benefits. It makes it more profitable. Certification also helps add value to the overall book of the vehicle to certain banks, which helps with negative equity and helps to get deals bought.” — Steven Amos, pre-owned manager, Stew Hansen Dodge Chrysler Jeep Ram.
“I think the biggest contribution to making additional gross profit is the recognition of a greater value in the certified pre-owned vehicle by the consumer. F&I products are sold when a customer recognizes a true value, and in CPOV sales, that value is already present. The CPOV customer is more likely to purchase F&I products because they want that ‘new-car coverage and assurance’ at a used-car price. We also sell maxcare bumper-to-bumper coverage that mimics the extended powertrain warranty on a certified vehicle, which most consumers opt for while in the finance office.” — Drew Haag, used-car manager, Performance Chrysler Jeep Dodge.
“CPO introduces the customer to extending their warranty coverage. This fits in nicely to selling the wrap coverage, which helps to increase your opportunities for sales in finance through CPO sales.” — Don Luke, dealer principal, Bill Luke Chrysler Jeep Dodge & Ram.
How has the increase in off-lease supply impacted your CPO operations?
“The off-lease vehicles coming in is a huge help; it eliminates some of the need to acquire vehicles through traditional auctions, plus the vehicles we acquire from our own new-car customers coming off lease have all our service history and records attached to them. It’s really a win-win both for the dealer and the consumer buying the off-lease vehicle, as well.
“This, of course, is my opinion, but ultimately a strong CPO program to help us as a dealer group is essential, as well. (If) Cadillac wants to play in the luxury brand trying to compete with juggernauts like Audi, BMW, Mercedes Benz and yes, Lexus, they had better keep up the dealer support and programs. I have yet to see a TV commercial or radio spots even mentioning Cadillac CPO, unlike the aforementioned.” — Mike Ruiz, certified pre-owned sales manager, Patrick Cadillac.
“The increase in off-lease supply has had a very minimal impact on our CPO operation. It has opened up more inventory pools for us to buy from to restock our inventory, but we still value-price all of our vehicles against the market. At Serra Pre-Owned, we certify every vehicle we can because we believe that the value to our customer gives us a market advantage. With off-lease supply continuing to grow in 2018, we believe we can sell over 1,000 GM CPO (units) in 2018.” — Bob Davidson, used sales manager, Serra Buick GMC Cadillac.
What is necessary for CPO sales to continue increasing and hitting records on a national level?
“I feel that for CPO sales to continue to grow the manufacturer needs to have a strong and balanced leasing plan, since the lease returns purchased by the dealers make up a large portion of the CPO sales.” — Kyle Herman, sales manager, Luther Brookdale Chevrolet Buick GMC
“The keys to increasing CPO sales to record levels will take a team effort from the manufacturer and dealers. Manufacturers need to raise awareness of the benefits and value of the CPO program with consumers utilizing digital and traditional marketing campaigns. Also, incentivizing sales programs like mark of excellence would help drive dealership sales professionals to focus on selling more CPO units. At the dealership level, we need to be completely committed to selling CPOs and make sure the CPO units stand out on the lot, are merchandised well online, stocking/sourcing strategy in place and have a full proof process to make sure reporting is done properly.” — Bryan Long, used-car director, Courtesy Chevrolet
“All the dealers need to buy into the certified program. At Classic Chevrolet, every car, truck or SUV that qualifies to be certified is certified, and we never decertify it to sell it cheaper. Our salesman are trained to show the customer the benefits certification gives them and the value it brings to the vehicle their purchasing.” — Danny Bowen, pre-owned director, Classic Chevrolet Inc.
“My opinion is that one of the biggest factors in continuing to grow the CPO program is factory, bank and dealership relationships. Inventory is the biggest hurdle we climb when trying to stock certified units at the levels we want. A lot of times, when trying to buy leases back at turn-in or even at the sale, they are way off of the money. There has to be a better way for the banks to get what they need while allowing the dealers to be the ones to get their hands on this product. We need to be able to buy more of this product right at time of turn-in.” — Mike Fountain, general sales manager, DePaula Chevrolet
Staff writers Nick Zulovich and Chris Hart-Williams contributed to this report.