WOODCLIFF LAKE, N.J. -

In a business as relatively new as the certified pre-owned market, the tides are still turning, and nothing seems to stay the same for long.

Just a couple of years ago, off-lease vehicles had dried up, and it was no easy task to fill a CPO lot; now, off-lease supply is flowing in droves, and dealers are able to be a bit pickier about which vehicles they certify.

Similarly, the consumer environment is changing, as well. Go back five years, and many consumers had no idea what CPO even stood for, let alone the value it provided. Now, many shoppers know just as much as a dealership’s salespeople do about automaker CPO programs.

Of course, as the tides shift, so do CPO strategies. That’s why Auto Remarketing reached out to Kevin Rustad, national pre-owned sales manager for BMW, to get his take on today’s certified market.

AR: Do you find that shoppers are better informed of the value of CPO vehicles nowadays as certified vehicles become more popular?

Kevin Rustad: Yes, consumers seem more educated about CPO vehicles than in the past. Most customers seem to know that “CPO” means that the car is somehow “better” than a non-certified car, but there’s still a lot of education needed in terms of exactly what our certification process is and the overall value of certification to our customers.

AR: How do you best convey the value of your certified vehicles to potential customers?

KR: We have a layered approach. We instill the core values of our certified program into all forms of our marketing because there are consumers who may not know all of the benefits of buying a certified pre-owned BMW.

AR: What are some of the best outlets you have found for CPO advertising? Where are the best places to reach CPO customers?

KR: Digital has been a very successful outlet for us. Since we know almost all of our customers start their search online, we know we need to have a strong digital presence.

AR: Once a customer is on the lot, what kind of in-dealership advertising promotes the certified program best, and why?

KR: We have point-of-sale merchandising on our vehicles as well as brochures and digital displays inside our showrooms.  Again, it’s important to have a strong certified message throughout the sales process as a constant reminder of the program, the benefits and the value.  

AR: Off-lease vehicles have come streaming in this year after dealers put up with tight used supply for years after the recession. How has this impacted sourcing and stocking strategies? Has incoming supply allowed dealers to be choosier about which vehicles they certify?

KR: Our average maturities over the last five years have been relatively stable.  Therefore, we have not had a tremendous influx or change in sourcing strategy for this year.

AR: What sourcing methods are proving to be the most beneficial for the CPO program this year, and why?

KR: Trade-is, closed sales, etc. Off-lease and loan turn-ins remain the strongest source of used vehicles for our centers.  The dealers know these vehicles, they have seen them before because they have serviced them over the course of the ownership cycle.  Our centers use auctions and other sources to supplement their inventory, as opposed to using them as a primary method.

Editor's Note: This story is featured in the Oct. 15-31 print and digital editions of Auto Remarketing, which is our annual CPO Dealer of the Year issue that includes a special look into CPO trends and best practices