On a Monday in late April 2015, Auction Direct USA announced that it was partnering with the National Independent Automobile Dealers Association to offer NIADA Certified Pre-Owned vehicles at its stores.

A few days later, NIADA and Auction Direct leaders gathered at the latter’s Raleigh, N.C., store for a ceremony to celebrate the partnership.

Auction Direct chief executive officer Todd Hoagey was back in the Raleigh store on Thursday, just over a year after Auction Direct jumped into the NIADA CPO program, for a push to spread awareness of the program.

But this time, instead of being a newcomer to the certified program, Auction Direct is its top seller.

In fact, three of the top five NIADA CPO-selling dealerships are Auction Direct locations, including the Raleigh store, which ranked No. 1 nationally.

According to the association — which could not provide sales numbers for contractual reasons — the top five dealership locations for NIADA CPO, based on full-year 2015 sales, are the following:

• Auction Direct USA (Raleigh, N.C.)
• Century Motors of South Florida
• Auction Direct USA (Victor, N.Y.)
• Auction Direct USA (Jacksonville, Fla.)
• Aussie Auto, Inc.

So, what’s next for Auction Direct when it comes to NIADA CPO?

While it may be too early to set concrete goals, Auction Direct is fine-tuning its own NIADA CPO metrics to determine what works best.  

“We’re experimenting with inventory level and seeing the effect on the sales level,” Hoagey said.  

In other words, what is the ideal share of Auction Direct inventory to put through NIADA certification? And that may vary from market to market.

 “We know the program works, we know that the consumer demand is there,” Hoagey said. The key, he added, is figuring out how much exactly from a percentage standpoint.

“Because there is a price difference in a CPO and a non-CPO vehicle. But the retail benefit of a CPO far outweighs the non-CPO,” he said.  

A big key will also be working with the association to help push the awareness of NIADA CPO.

Hoagey was joined by Auction Direct executive vice president and chief financial officer Kevin Phelps as well as Kevin Condon, the general manager of the Raleigh store, for an on-site interview with Auto Remarketing.

During the interview, Phelps said the NIADA CPO program allows dealers like Auction Direct to distinguish themselves from automaker CPO programs by offering certification on older vehicles.

Most OEM programs allow for certification on vehicles up to five or six years old. And, often, the bread-and-butter is the off-lease vehicle, which tend to be even younger.

 According to its website, NIADA CPO has two age-limit tiers, one that allows for vehicles going back eight years; the other, 14 years.

Through NIADA CPO, Auction Direct targets customers who are interested in cars that are further back on the age spectrum than late-model units, the executives explained, but still want the reassurance and peace-of-mind that certification brings.

Condon says Auction Direct’s strategy is to target vehicles out of manufacturer warranty for NIADA certification.

“That’s the one that’s really going to give the customer the most value,” Condon said.

In essence, he said, it’s for the customer that might not be able to afford the car with only 10,000 miles or that’s still under OEM warranty.

And Condon said a big part of the value of using NIADA CPO has been the fact that it’s verified by a third-party like NIADA.  

Not to mention, they typically turn faster. At the Raleigh store, the NIADA CPO vehicles turn 11 days quicker than non-certified “bread-and-butter” inventory. 

Auto Remarketing will have more from our interivew with the Auction Direct leadership in coming editions.