DETROIT and MONTVALE, N.J. -

In the retailer’s first-quarter earnings conference call back in April, AutoNation president and chief operating officer Mike Maroone attributed some of the group’s modest year-over-year dip in same-store gross profit per used vehicle retailed to “the increased cost to acquire vehicles for certified pre-owned programs.”

Of course, slimmer gross profit per vehicle may not be the only impact that dealers can see from higher CPO vehicle acquisition costs. Arguably, it may drive up prices for consumers.

With that in mind, Auto Remarketing asked OEM CPO program leaders what dealers can do to show the value of buying certified when the cost of acquiring a CPO-worthy vehicles are high for dealers, thus lifting the retail price the consumer has to pay.

Rob Zilinski — manger of pre-owned operations at Mercedes-Benz USA — boiled it down to four key suggestions of basic techniques dealers can employ, as follows:

1. What is “confidence” worth? The manufacturer and dealer stand behind certified pre-owned vehicles. The same can't be said even for the “best looking” pre-owned vehicles that are sold outside the manufacturer warranty.

2. Be transparent — use a tool like vAuto that will show your pricing versus other non-certified vehicles. When the customer sees that you are transparent, then you can start to build the CPO value story to bridge the
pricing gap.

3. Don't hide the work done — show the service repair orders for the work completed to justify the price and expense taken to bring the car up to a certified pre-owned level. Show the customer how much work they will not have to worry about, but may need to consider for a non-certified vehicle.

4. Be confident about the price with your words and body language — customers can pick up on insecurity and hesitation. If you don't believe in the car or value you provide, the customer won't either.

Over at General Motors, Larry Pryg — national manager of certified pre-owned operations — had this to say: “Chevrolet, Buick and GMC Certified Dealers have a lot of program benefits to highlight, and it starts with the best-possible product — vehicles that must pass a 172-point inspection or be reconditioned before certification.

“From there, our dealers offer a wide variety of financing options to get consumers in the vehicles they want,” he added.
 
“Increasing the confidence and value of a certified decision over the course of ownership, the Chevrolet, Buick and GMC Certified Program offers Owner Care and its exclusive two-year/30,000-mile standard CPO maintenance plan and a five-year/100,000-mile powertrain limited warranty and a 12-month/12,000-mile bumper-to-bumper limited warranty, both with $0 deductibles,” Pryg continued.

“Additionally, consumers get the peace of mind of 24/7 roadside assistance, standard OnStar for 3-months, a complete vehicle history report, and one of the nation’s largest dealer networks.”

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.