DEARBORN, Mich. -

Lasco Ford was already the brand’s No. 2-ranked dealer for certified pre-owned sales, but general manager Matt Lasco told Auto Remarketing that with the revamped CPO programs the automaker is rolling out today, his store can see certified sales growing by 20 percent.

With both the Ford/Mercury and Lincoln certified programs receiving upgrades, CPO executives with both brands talked with Auto Remarketing earlier this week about what these changes entail.

The most prevalent changes are on the Ford/Mercury side, with the crown jewel of these enhancements being the expanded warranties, says Ford CPO brand manager Renee Godfrey.

The comprehensive warranty for Ford/Mercury CPO is now 12-month/12,000 miles, up from a three-month/3,000-mile warranty under the previous plan. Additionally, the powertrain warranty has been increased from a six-year/100,000-mile package to a seven-year/100,000-mile deal.

“The biggest and probably the enhancement we’re most proud of is our warranty coverage,” Godfrey said.

And that change – among all the other upgrades – has Lasco thrilled.

“I’m excited. We’re a large volume used-car dealer. Last year, I think we were No. 2 in the nation by just a few cars to Galpin Ford,” Lasco said. “The program is already great, and we’re already outselling in our market the GMs and the Toyotas and everybody on certified cars.

“So now that we’ve got that 12-month/12,000-mile that some of our competitors already had, and now that we’ve got that extra year and some better interest rates, we’re completely excited,” he continued. “We think that we’re going to see a 20-percent rise in CPO sales as a dealer.”

While the bulk of the enhancements are on the Ford/Mercury side, the upgrades for both programs will include consistent, widespread financing deals for all CPO vehicles, the executives explained.

“We’re offering consistent, competitive APR offerings for Ford Credit, as well as for Lincoln AFS across our entire certified pre-owned product line,” said Lincoln CPO brand manager Rob Martin.

“Before, a lot of times we would be offering rates on specific models or picking and choosing. And now we’re actually blanketing the entire certified pre-owned vehicles for both Ford/Mercury as well as Lincoln with consistently competitive APR programs, as well as enhanced reserves,” he added.

Ford/Mercury Changes

Sharing more of the upgrades for Ford/Mercury, Godfrey mentioned the enhanced reserves for dealers, as well as increases in marketing support “to really kick off the program.”

Additionally, the inspection process has been upped from 169 points to 172 points to cover technological amenities that are now common in late-model pre-owned vehicles.

Furthermore, Ford/Mercury’s program will also gain new personnel, as Ford is adding resources in both the general office and in the field. Moreover, the automaker is implementing significant increases in fixed marketing and consistent variable marketing.

When asked about the benefits to dealers, Martin said: “The enhancements on the Ford side are definitely going to (result in) more competitive program. We knew we were behind the competition with the three-month/3,000-mile program.

“We’ve seen a lot of OEMs strengthen their warranty offerings. So, we’re looking for a better value proposition for the consumer,” he continued. “In addition we’re providing our dealers with a better opportunity to make better profits on certified pre-owned units.

“We all know what goes on in the industry as far as faster turn, higher grosses typically, and we want our dealers to be able to maximize that profit with certified pre-owned,” Martin went on to share.

Input from Dealers

In crafting the programs, the automaker turned to its dealer body for help. Both Lincoln and Ford worked with their respective dealer councils in building the revamped offerings.

“Both programs were built in concert with the respective dealer councils,” Martin said. “The biggest thing that the dealers wanted is (that) they wanted to see more marketing support from us, they wanted to see the consistent APR messaging from us.”

Godfrey chimed in, noting: “A lot of our dealers have competitive franchises, and I think that they see what those programs are and they really wanted us to be competitive with the other manufacturers.”

One of the men helping to lead the dealer side of things was Terry Kidd, who is the owner of Kidd Ford Lincoln in Morrison, Tenn.

Kidd serves on both dealer councils, and, in fact, he is the chairman of Ford’s Select Dealer Council, which represents the smaller Ford dealerships. Additionally, he serves on the Select Dealer Council for Lincoln represents the small Lincoln dealers, as well.

“We wanted to have the best program that we could offer to the dealers and to the customers based on what the competition is doing, so that it’s a good value for the customer and a good value to the dealer and that it’s worthwhile for the dealer to participate in it,” Kidd said, when asked what Ford dealers were looking for in the prgoram.

He went on to add: “I’ve been a participant in the Ford program for a long time and I think that the culture we have as a dealership is one that we like the program, we see the value that it offers customers. I think other dealers wanted to see the value for them, because they wanted to be able to make adequate profit on the front end in their finance area as well. That was a very important aspect as well as offering a program that customers will like and that customers will want.”

When asked if the automaker is planning to bring dealers in to CPO, Martin explained that the goal is to work more closely to increase the engagement of some already-enrolled stores.

“We will certainly add some more participating dealers, but for the most part, it is engaging many of the dealers that are enrolled in our CPO program, but are not currently engaged,” he noted.

Lincoln Enhancements

Looking more specifically at the Lincoln brand’s upgrades, Martin said that there is no warranty coverage change and that essentially, “the investment comes at the marketing levels.”

He explained: “For variable marketing, it’s the APR messaging; consistent across all models including 72-month rates on all vehicles. In addition, on our fixed-marketing side, we’ve increased the amount of spend to cover more of our endemic properties,” referring to things like Cars.com and AutoTrader.com.

Lincoln also has some sales events in store for CPO, Martin added.

Additionally, Lincoln’s inspection process now has 200 points, up from 169.

“We elected to make the change to align more with the luxury industry and to differentiate the Lincoln program from the Ford Program,” Martin explained.

Offering some more background, he noted: “The real reason we’re revamping our program is we needed to put a lot of focus on this business as we continue to grow. For Lincoln, we are going to launch our new MKZ later this year, which is a huge vehicle for us,” he noted, also mentioning the great deal of press regarding the automaker “reinventing” its luxury make.

“And for us, certified pre-owned is an important part of that because we want to engage and introduce as many customers as we can to Lincoln and ultimately provide those customers with a new-car experience that will lead them into new Lincolns in the future,” Martin continued.

What’s also pivotal for both Ford and Lincoln is the residual support that the revamped CPO programs will hopefully build for the brands, Martin emphasized.

“Certainly a goal for us is to grow a strong certified pre-owned presence that will ultimately boost residual values and support our brand for the long term,” he added.

End Goal

Overall, what the automaker aims to do for both programs is to increase the combined market share. The automaker’s new-car market share (including all brands) was about 15 percent in 2011, but its CPO market share was 7.5 percent.

“I think the most important goal is that we looked at what our market share was on the new-car side and we looked at our competitors, and what their new-car market shares were relative to their CPO market shares,” Martin explained. “And we knew that we were behind. Frankly, our goal is to close the gap. We want our certified pre-owned market share to be similar to what our new-car share is.”