Nissan is broadening the age and mileage eligibility in its certified pre-owned program through a new offering called “Certified Select,” which will also include certain non-Nissan vehicles.
Vehicles up to 10 years old with up to 100,000 miles will be included in Certified Select, which provides an 84-point inspection and six-month/6,000-mile limited warranty and roadside assistance, the automaker said in a news release.
Also included is one free maintenance visit during the first year of ownership.
Consumers will also be able to view the Nissan Certified and Certified Select inventory of participating dealers through the Nissan@Home online shopping program, which will also allow dealers to deliver those cars directly to the buyer’s home.
“As pre-owned vehicle sales continue to outpace those of new vehicles in the marketplace, Certified Select allows our trusted dealerships to offer more high-quality options for shoppers,” said Dan Mohnke, who is vice president of eCommerce at Nissan U.S., in a news release.
“And we’ve further committed to customer satisfaction by offering a seamless online purchase option and a complimentary maintenance visit.
The company said in the release that the eligibility requirements for the standard Nissan Certified program remain the same. Eligible vehicles can be up to six years old with 80,00 miles.
Nissan Certified also still includes a 167-point inspection along with a seven-year/100,000-mile limited warranty, with two free maintenance visits.
OEMs continue to broaden CPO
Nissan’s expansion of CPO eligibility comes amid several other automakers to do the same.
Stellantis recently expanded its certified pre-owned vehicle program in North America with the launch of “CPO Go,” which includes vehicles that are between 6 and 10 model years old and/or have mileages between 75,001-120,000 miles.
Previously, the automaker’s CPO eligibility only covered vehicles between 1 and 5 model years old with 75,000 miles or fewer.
Earlier this year, American Honda announced that it expanded the eligibility of its Honda and Acura certified pre-owned programs by adding respective tiers that allow for vehicles up to 10 years in age to be certified.
The Honda brand has launched HondaTrue Used as a CPO program tier, while the Acura brand has debuted Acura Precision Used.
Each of these CPO tiers cap the eligible vehicle age at 10 and have no mileage limit.
HondaTrue Used vehicles include a 100-day/5,000-mile non-powertrain coverage and the same limits for powertrain coverage. Acura Precision Used offers six-month/7,500-mile powertrain and non-powertrain coverage.
Acura’s CPO program now includes two tiers: Acura Precision Certified (which is limited to vehicles up to six years in age and 80,000 miles) and Acura Precision Used. Honda’s CPO program now includes three: HondaTrue Certified+, HondaTrue Certified and HondaTrue Used. The respective tier extensions are now available for Honda and Acura dealers to use.
The Ford Blue Advantage program launched in 2021, and it includes an expanded level of inventory from what would typically be included in the traditional Ford certified pre-owned program.
Ford dealers can now use two different levels of certification for used vehicles: Gold Certified and Blue Certified.
Gold Certified, which is essentially the standard of the traditional Ford CPO program, includes a 172-point inspection and includes a 12-month/12,000-mile comprehensive limited warranty (whichever comes first) and a seven-year/100,000-mile (whichever comes first) powertrain limited warranty.
These vehicles must be 6 years old or newer and have fewer than 80,000 miles on the odometer.
Meanwhile, the Blue Certified tier expands that eligibility. Those vehicles must be 10 years old or newer and have 120,000 or fewer miles. They undergo a 139-point inspection and include a 90-day/4,000-mile (whichever comes first) comprehensive limited warranty. Additionally, non-Ford vehicles can be certified under the Blue segment.
Based on their current pace, full-year certified pre-owned vehicle sales are likely to see a double-digit-percentage decline from 2021 and reach their lowest annual tally in eight years. However, there were was some momentum in August, at least from a sequential standpoint.
That’s according to a Data Point report from Cox Automotive, which said there were …
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How should we think of certified pre-owned?
Is this a used, new or a new used vehicle, or should we stick to calling it “like-new?” Regardless of what we classify as CPO, we accept that CPO vehicles can be some combination.
We treat it like a different product. How we market, advertise, label and sell these vehicles somehow proves that.
Exiting the Great Recession, sales of certified pre-owned vehicles barely exceeded 1.5 million units. The industry would have to wait until 2013 for annual CPO sales to exceed 2 million units. However, since 2012 the industry has seen annual sales grow by 1 million units.
While 2.5 to 3 million CPO sales a year might seem small compared to the broader used-vehicle market, which sees 40 million sales a year, the CPO market is significant to the used retail market, the market that involves dealers.
Bear with me as I dust off my industry insights hat. CPO sales are interesting to forecast because a few variables can impact supply.
First, the strength of the retail leasing market two to three years prior to the current sale year plays a crucial role in determining the possible universe of what can be certified. Typically, vehicles coming off lease drive the supply of what ends up being certified.
It’s important to note that not all off-lease vehicles become CPO vehicles. Secondly, the current market impacts the strength of CPO. Overall strength in the used retail market affects dealer demand (and ability) to certify off-lease units. And lastly, OEM incentives on CPO programs can influence the rate at which eligible vehicles are certified by dealers.
Keeping this in mind, where do we see CPO sales? It’s hard to envision an environment where we have a dramatic pullback in CPO sales.
Could it take a year or two to set a new annual sales record? Sure. Do we get back to 2012-2014 levels?
Probably not. The challenge in the CPO market today (and in the foreseeable future) is not demand but supply. But hovering around 2021 levels of CPO sales is probably the best bet when thinking about how the market will perform over the next couple of years as we get past the challenges caused by the pandemic.
The beauty of certified pre-owned is not in the respective OEM program, but it’s the consumer that’s jumping into the CPO vehicle. A common term used to describe some CPO shoppers is “budget-conscious,” and while that may be true for a subset of that population, I think we need to emphasize that these are, broadly speaking, “value-driven” shoppers.
These consumers are willing to pay a premium for a vehicle due to their understanding of CPO programs and what that means for the quality of their purchase. Here you have the perfect loyalty scenario if you are a dealer and OEM: a consumer willing to spend extra on a vehicle and, in return, asking for peace-of-mind on their purchase.
A good-to-great experience in that vehicle and with that brand adds strength and support in laying the foundation of consumer loyalty. Add in a customer’s in-store experience related to service, and you have a great tool to keep a customer engaged with the brand and dealership.
How can we test this?
Let’s think about incentives. Vehicle shoppers respond to incentives, and we know that the industry is not shy about spending billions of dollars on various incentive programs.
Why not conquest shoppers into CPO to drive loyalty? What is the long-term return on an incentive program getting a non-CPO customer into a brand’s CPO program, and what does that mean to their next one, two, or three future vehicle purchases?
Sure, current market conditions in new and used vehicles suggest it might not make sense to allocate incentive dollars to test this idea. Still, soon it might be an economical way to drive sales, consumer satisfaction and strengthen loyalty.
There is no denying CPO sales volume is likely to be impacted by the pandemic’s disruption of new-vehicle sales and drop in the retail leasing rate over the last couple of years.
Even with CPO sales forecast to see slow/low growth, the value of the vehicles sold is expected to increase greatly due to the changing mix of vehicles being sold CPO. A constant younger mix of vehicles, favoring light trucks and eventually electric vehicles, suggests vehicles being sold into the CPO market while see average transaction prices rise due to that shift.
This means the CPO market offers consumers a wider range of options under $30,000 than the new-vehicle market. Whether annual CPO sales swing up or down a few hundred thousand units might impact short-term forecasts, it’s safe to assume this $50+ billion (and growing) industry isn’t going anywhere.
Near-term supply constraints can be overcome in a few years but the foundation for demand that’s been vital to the growth of CPO was laid over a decade ago and continues to strengthen.
Zo Rahim is the founder and chief executive officer of CPyO. This new site is designed to help dealers increase visibility of their certified pre-owned vehicles for sale, help automakers boost awareness of their certified programs and give consumers more confidence in shopping CPO. Rahim is a former automotive analyst at Cox Automotive.
For those who enjoy spring more than summer, the certified pre-owned vehicle market this year is kind of like the weather in the South.
It “peaked in April” and just got worse from there, according to a report Tuesday from Cox Automotive.
There were 205,924 CPO sales in June, compared to …
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May’s soft certified pre-owned vehicle sales performance may be more than just a speed bump. The CPO market is likely headed to its softest year in close to a decade
Following four consecutive month-over-month gains to start 2022 on a high note, the 208,423 CPO sales in May marked a …
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If your dealership actually has a plentiful amount of certified pre-owned inventory to retail this Memorial Day weekend, the experts at Edmunds are steering potential buyers toward it — especially if that customer isn’t interested in waiting for a new model to arrive from the factory.
“If you’re a habitual new-car buyer, certified pre-owned inventory might be a good place to look in today’s tight new-vehicle market,” Edmunds senior manager of insights Ivan Drury said in a news release distributed on Tuesday.
“With CPOs, you’ll likely receive subvented interest rate offers, together with ‘peace of mind’ warranties. Plus, unlike five to 10 years ago, today’s CPOs are likely to have many of the creature comforts you’d look for in the new car market, like Apple CarPlay and backup cameras,” Drury continued.
Edmunds analysts also noted that a growing number of consumers are being forced into the used-vehicle market compared to years past as a result of supply constraints and elevated prices for new vehicles.
Edmunds data reveals that in April, 45% of consumers who made a vehicle purchase with a trade-in bought a used vehicle, compared to 35% in April of 2021 and 38% in April of 2020.
“Memorial Day weekend 2022 is not going to present as many discounts or incentives for car shoppers as years past, so consumers need to set their expectations accordingly,” Drury said.
“And regardless of preferences or even budget, most car shoppers should be prepared to buy used this summer holiday weekend since they might not find many new options available,” he went on to say.
Sounds like CPO could be the way to go, especially in light of the financing data Edmunds also shared:
Financed Used Vehicles Averaging the Lowest APRs
May 2022
|
Model Year
|
Make
|
Model
|
Average APR
|
|
2019
|
Lexus
|
RX 350
|
4.82
|
|
2019
|
Lexus
|
NX 300
|
4.98
|
|
2021
|
Toyota
|
4Runner
|
5.12
|
|
2019
|
Subaru
|
Forester
|
5.19
|
|
2020
|
Ford
|
Expedition
|
5.19
|
|
2019
|
Acura
|
MDX
|
5.20
|
|
2019
|
Subaru
|
Ascent
|
5.20
|
|
2020
|
Subaru
|
Outback
|
5.22
|
|
2019
|
BMW
|
X5
|
5.24
|
|
2021
|
Ford
|
F-150
|
5.32
|
Source: Edmunds
In this episode of the Auto Remarketing podcast, we catch up with former Cox Automotive analyst Zo Rahim, who is the founder and chief executive officer of CPyO.
This new site, which has launched in Atlanta, is designed to help dealers increase visibility of their certified pre-owned vehicles for sale, help automakers boost awareness of their certified programs and give consumers more confidence in shopping CPO.
Rahim explains the origin of the idea, CPyO's roadmap and funding strategy, and the opportunity that exists in serving a niche market.
To listen to the conversation, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
Former Cox Automotive analyst Zo Rahim, who knows a thing or two about the used-car market, has launched a new platform and marketplace focused solely on certified pre-owned vehicles.
CPyO (which Rahim explains is pronounced SEE-PEE-YO) is a desktop solution that is designed to help dealers increase visibility of their CPO units for sale, help automakers boost awareness of their certified programs and give consumers more confidence in shopping CPO.
CPyO has launched in Atlanta, with plans to expand in the second quarter. The company describes the platform currently resembling a “search engine bringing together CPO listings offered by various brands.”
The plan is to broaden it and allow dealers and OEMs to list and market CPO vehicles, helping them target a niche group of consumers specifically looking for certified vehicles.
“With roughly 3 million sales per year, certified pre-owned vehicles play a vital role in the used retail market,” said Rahim, who is CPyO’s founder and chief executive officer, in a news release.
“CPyO provides a new way for brands and dealers to highlight their CPO products and interact with a growing tech-savvy and budget-conscious consumer base learning more about CPO every day while facing affordability and supply challenges from the broader retail market,” he said.
CPyO aims to allow for direct and/or exclusive certified vehicle lists and also plans to add built-in vehicle comparison tools for consumers, the company said.
“While we are excited about this launch, we are even more excited about our roadmap,” Rahim said. “We are looking forward to enhancing our offerings to brands, dealers, and consumers for a robust and easy way to explore the world of CPO. Using state-of-the art-technologies and an innovate approach to the used retail market, CPyO is ready to offer the market an unparalleled solution.”
More information can be found at cpyo.co. And stay tuned for an upcoming episode of the Auto Remarketing Podcast, where we will talk with Rahim about CPyO in more detail.
Good news, bad news for certified pre-owned vehicle sales last month.
First, the plus side.
March’s 219,360 CPO sales beat February’s total by 14.3%, marking the third straight month of …
Read more
American Honda has expanded the eligibility of its Honda and Acura certified pre-owned programs by adding respective tiers that allow for vehicles up to 10 years in age to be certified.
The Honda brand has launched HondaTrue Used as a CPO program tier, while the Acura brand has debuted Acura Precision Used.
Each of these CPO tiers …
Read more
