For the “Best CPO Dealers in the United States” edition of Auto Remarketing this winter, we asked top-selling Mercedes-Benz certified pre-owned dealers how the quality of CPO allows for flexibility of expanding financing terms to help buyers stay within their budget parameters.
Here’s what they had to say.
“Simply put, CPO vehicles command greater value than their non-certified counterparts, and they hold their value for a longer period of time. Knowing that the vehicle has passed the manufacturer’s rigorous inspection process and with the assurance of an extended factory warranty, a CPO vehicle brings a high level of trust to our buyers and confidence to our lenders,” said Randy Powell, the general manager and partner, Mercedes-Benz of Birmingham, which sold 572 certified vehicles last year.
“At our Mercedes-Benz store, this allows Mercedes-Benz Financial Services to leverage the value of certification by offering special programs along with excellent rates and longer terms. Together, this makes for an unbeatable package of product and financing options,” Powell said.
Over at Mercedes-Benz of Rockville Centre — which sold 499 CPO vehicles in 2015 — pre-owned sales manager Cary Weinstein said: “Lending on a vehicle that went through a manufacturer’s strict CPO inspection process allows banks to offer longer terms, lower rates and more advance, allowing the buyer increased flexibility when fitting a vehicle purchase into a budget.
“Continued improvements in reliability and durability coupled with a manufacturers-CPO warranty and prepaid maintenance plans not only increases customer brand loyalty, but also increases competition among lenders looking to finance higher quality automobiles.”
The full list of Mercedes-Benz's top dealers for CPO sales in 2015 is below:
1. Fletcher Jones Motorcars | Newport Beach, Calif. 1,885
2. Park Place Dallas | Dallas 1,307
3. Keyes European, LLC | Van Nuys Calif. 1,210
4. Mercedes-Benz of Tampa | Tampa, Fla. 1,038
5. Autobahn Motors | Belmont, Calif. 914
6. Mercedes-Benz of Westminster | Westminster, Colo. 848
7. RBM of Atlanta | Atlanta 764
8. Mercedes-Benz of West Chester | West Chester, Pa. 674
9. Mercedes-Benz of North Olmsted | North Olmsted, Ohio 646
10. Mercedes-Benz of Birmingham | Hoover, Ala. 572
11. Mercedes-Benz of Rockville Centre | Rockville Centre, N.Y. 499
Staff Writer Nick Zulovich contributed to this report.
As part of our “Best CPO Dealers in the United States” edition this winter, Auto Remarketing reached out to a few of the top-selling Hyundai dealers about certified pre-owned supply.
We asked them to share some of the strategies they use to make sure there’s enough CPO inventory on the lot.
“We are in a fortunate situation that we create our own CPO inventory,” said Scott Fink, the president/chief executive officer, Hyundai of New Port Richey — Hyundai’s top-selling CPO dealer and Auto Remarketing’s 2014 CPO Dealer of the Year.
“We trade our Hyundai owners out of their vehicles aggressively in an effort to accomplish two goals: No. 1. Sell another new Hyundai. No 2. Create another CPO Hyundai that we can market. This strategy enable us to ensure we have a strong inventory from sedans to crossovers to take advantage of the CPO demand in the market place. We have yet to have to go to the auctions (on site or online) to purchase inventory.”
Over at Lester Glynn Hyundai — which ranked fourth with 771 CPO sales in 2015 — president Adam Kraushaar said: “First strategy is to actively work the service drive. We are very successful in upgrading owners of 1-3-year-old vehicles into new vehicles. Generally, those trades are extremely well maintained. We can put a more aggressive ACV because we know the reconditioning cost will be minimal.
“Every lease turn-in goes through the process to determine if we want to own the car. First we try to do that at the time the person is buying a new car. If it doesn’t make sense we ground the car and get a market based price … Finally, our fleet of loaner cars come out as certified.”
At Rick Case Hyundai in Plantation, Fla., general manager Leroy Larson says that an ideal scenario would be for the store to get all its supply in as trade-ins and then sell each of those customers a new car, but he acknowledges “that’s not realistic.”
However, the store has found success through a number of methods, including reaching out to its customer database and offering to either trade those customers out of the car or buying their cars outright, even if the shopper doesn’t buy a new car.
In fact, Rick Case Hyundai advertises that it buys cars from consumers.
The dealership also works the service lane to find ideal trades, Larson said, and offers those consumers high values on the trade or low purchase/lease payments. They may also turn to the factory sales in the auction lanes
At Jim Ellis Hyundai, Wesley Ellis — who is the vice president of Jim Ellis Hyundai/ Jim Ellis Volkswagen of Atlanta — said the store’s strategy is to hit auctions, its own internal database and sourcing the waiting room of its service department.
Finally, Lenny Checheris, general manager of Luther Bloomington Hyundai, detailed his store’s strategy, a bit of which involves focusing on off-lease.
“We have always been strategic with our acquisition of pre-owned Hyundais. We have found success by acquiring vehicles through live Hyundai auctions, lease returns and using sourcing software in our service department,” he said. “We also made a decision in 2011 to really focus on leasing. Lease returns have been our best source for late-model, quality Hyundais. Most lease return vehicles were bought and serviced here, which provides a great history for our future Hyundai owners.”
The complete list of Hyundai’s top 10 CPO dealers for 2015 is as follows:
1. Hyundai of New Port Richey 1,344
2. Rick Case Hyundai (Plantation) 1,104
3. Hardin Hyundai 802
4. Lester Glenn Hyundai 771
5. Jim Ellis Hyundai 763
6. Doral Hyundai 724
7. Planet Hyundai 703
8. Conicelli Hyundai 612
9. Hyundai of El Paso 604
10. Luther Bloomington Hyundai 588
It was a tight race at the top, but Galpin Ford managed to rank as the top-selling certified pre-owned dealer for Ford in 2015. The North Hills, Calif., dealership sold 1,464 CPO units last year.
As part of our “Best CPO Dealers in the United States” issue this winter, we asked Al Joseph — the general manager of used cars for Galpin Motors — how Galpin Ford provides a like-new experience for its CPO customers.
“It starts with an incredible team that prides itself on providing our customers with the best car-buying experience they have ever had,” Joseph said. “And when you combine that with phenomenal product, it really makes it fun for our customers.”
If the name Galpin Ford sounds familiar, it should; the store was Auto Remarketing’s 2013 CPO Dealer of the Year.
Ford’s complete top 10 CPO sales ranking for 2015 is below:
1. Galpin Ford | North Hills, Calif. 1,464
2. Brandon Ford | Tampa, Fla. 1,401
3. Washington Ford | Washington, Pa. 1,394
4. Mullinax Ford | Apopka, Fla. 1,339
5. Capital Ford | Raleigh, N.C. 1,202
6. McCombs Ford West | San Antonio 1,069
7. Jordan Ford, Ltd | San Antonio 1,055
8. Future Ford Lincoln | Roseville, Calif. 920
9. Beau Townsend Ford Lincoln, Inc. | Vandalia, Ohio 908
10. Five Star Ford | North Richland Hills, Texas 900
Staff Writer Emeritus Sarah Rubenoff contributed to this report
One of the biggest areas of growth for the auto business in recent years, and one particularly impactful for franchised dealers, has been certified pre-owned car sales.
Even after five straight years of record years, we may only be scratching the surface for CPO.
In an emailed Q&A with National Automobile Dealers Association chairman Jeff Carlson ahead of the annual NADA Convention & Expo, Auto Remarketing asked Carlson what he believes has made the certified pre-owned market such a strong option for franchised dealers these past five years, and whether he expects the momentum to continue.
“There is tremendous consumer demand for manufacturer-certified pre-owned vehicles, and we expect that trend to continue,” Carlson said. “Among other factors, leasing is up, and that means there will be a growing inventory of off-lease vehicles with low mileage returning to the used-vehicle market that consumers want and at a price point they find attractive.
“A strong CPO market is beneficial to consumers, dealers and auto manufacturers,” he said.
Another impactful trend in the car business has been the digitalization of parts or all of sales process and the online sales model, particularly over the past year or two.
This has been seen both from within their industry through programs from AutoNation and General Motors, for instance, and outside the car business, through so-called “disruptors” like Carvana, Beepi and others.
Auto Remarketing asked Carlson where he see franchised dealers fitting into this process, and how they might use it to their advantage.
“Customer satisfaction is the nature of auto retailing, and dealers strive daily to exceed the expectations of their customers. Car buyers have the power of the Internet, through many third-party sites, to review dealerships,” Carlson said.
“The result is that dealers are not only competing for customers based on price, but also on the value of the total package from sales, service, customer friendliness and community involvement,” he said.
Editor's note: For a complete look at NADA chairman Jeff Carlson's goals for the association this year and his take on the challenges and opportunities for dealers, stay tuned for our featured content in the April 1 edition of Auto Remarketing, our annual NADA Convention issue. That magazine will feature a special section that includes a more extensive feature on Carlson.
The Big 3 increased certified pre-owned sales by 1.6 percent year-over-year in February, moving 77,734 certified units, according to Autodata Corp.
Year-to-date, the Big 3 is down 1.5 percent with 147,038 sales.
Meanwhile, Asian brands sold 99,249 CPO vehicles for the month and were up 14.7 percent.
Through February, they are up 8.4 percent with 188,909 sales
European brands were down slightly in February (0.1 percent) with 34,499 sales, and year-to-date sales (66,486) were 3.5 percent softer.
Other highlights for the month include:
- Among the individual automakers, Fiat Chrysler Automobiles reached an all-time high, Autodata said. Including Fiat, it sold 18,768 CPO units in February (up 30.1 percent year-over-year). Without Fiat, it sold 18,716 certified vehicles (up 30.2 percent).
- Porsche said it sold 1,268 certified cars last month, which was its best February on record. It also beat year-ago figures by 33.5 percent.
- Kia reported its best-ever February. It sold 5,369 CPO vehicles, beating last February by nearly 10 percent.
- BMW North America reported that MINI posted its best February for CPO. Its 1,046 sales beat year-ago figures by 33.2 percent.
- Audi said it sold 3,713 CPO units (up 0.4 percent), which was its best February ever.
- North of the border, February meant CPO sales growth and a few records for some of Canada's luxury automakers, as reported by our sister publication Auto Remarketing Canada.
After a modestly slow start to the year, certified pre-owned vehicle sales rebounded last month with the best February on record, according to Autodata Corp.
There were 211,482 CPO sales for the month, which beat year-ago figures by 7.1 percent and January numbers by 10.8 percent, Autodata said.
Each of those months had the same number of selling days (24).
The resulting daily selling rate for this February was the third-best in history at 8,812 units moved per day, according to the firm.
In two months of 2016, dealers have sold 402,433 CPO cars, which is 2.5 percent ahead of 2015.
Domestics moved 77,734 certified vehicles in February and were up 1.6 percent. Asian brands sold 99,249 CPO vehicles and were up 14.7 percent.
European brands were down slightly (0.1 percent) with 34,499 sales in February.
Year-to-date, the Big 3 is down 1.5 percent with 147,038 sales.
Asian brands are up 8.4 percent with 188,909 sales, and European sales are 3.5 percent softer at 66,486.
In commentary paired with the company’s 2015 Used Vehicle Market Report, Edmunds.com director of industry analysis Jessica Caldwell said the certified pre-owned and late-model used-car markets are currently in “a Golden Age.”
In addition to hitting another record year in 2015 and reaching 55-percent sales growth over the last five years, CPO has also become an increasingly active part of franchised dealers’ used-car operations, according to Edmunds. And its share of franchised used-car sales will likely continue growing.
Last year, 22.4 percent of used-car sales at franchised stores were CPO, the company said. A year earlier, that number was at 20.9 percent. In 2010, it was 18.8 percent.
But there are some important intricacies in this market to pay attention to.
For one, Edmunds said, CPO shoppers research much longer than new-car shoppers or those consumers looking for non-CPO used.
In fact, behavior analysis on Edmunds.com indicates that certified pre-owned shoppers had about two times the number of page views per research session as each of the other two shopping groups. And the average length of the session was around twice as long.
More specifically, Edmunds said that a car research session for a CPO shopper took an average of 9.06 minutes, with 8.47 page views during the session. New-car shoppers averaged 4.25 minutes with 4.27 page views; used-car shoppers were at 4.00 minutes and 3.70 page views per session.
“CPO customers are shown to rely heavily on research, much more so than a strictly new or used shopper,” the Edmunds report said. “This new breed of shopper will undoubtedly increase in numbers as we begin to experience the increased volume of off-lease vehicles entering the market from all brands and segments.”
These shoppers also tend to be more like their new-car counterparts than those looking for used cars, Edmunds said.
For instance, 71 percent of CPO shoppers were ages 34 and up, with the remaining 29 percent in the millennial generation, according to Edmunds data. The new-car market had the same breakdown, while used-car shoppers were at 58 percent for ages 34 and up and 42 percent millennial.
“Given CPO’s higher price points, warranties, and buying experiences that similar to buying new cars, these findings shouldn’t be much of a surprise. CPO shoppers, however, clearly spend more time researching than all other shoppers, with more than twice as many page views and session durations as new-car shoppers,” the Edmunds report said.
Additionally, female shoppers commanded more of the CPO market (38 percent) than they did new (31 percent) or used (27 percent).
Consumers shopping for certified cars turned to their desktops (77 percent) more often than going mobile (13 percent) or using the tablet (10 percent).
For new-car shoppers, it was 59 percent desktop, 29 percent mobile and 13 percent tablet. For used, the numbers were 48 percent desktop, 42 percent mobile and 9 percent tablet.
‘Closer to 25 percent’
Following another record year, Edmunds is projecting a “similar result” for 2016.
The company predicts CPO share of franchise used sales will continue moving toward 25 percent, thanks largely to an increasing abundance of certified supply.
That would certainly be a big change from earlier this decade. In 2010, for instance, certified share of franchised used sales was at 18.8 percent, then dipped to 18.6 percent the following year and 18.4 percent in 2012.
It has since climbed to 19.3 percent in 2013, 20.9 percent in 2014 and 22.4 percent last year.
This is where the off-lease-driven supply gains come in.
“From 2012 to 2013, new-vehicle leases saw a spike of 657,949 units (or 25.6 percent), the largest ever year-over-year increase for leasing,” Edmunds said in the report. “These leases are steadily approaching their maturity date, and will help to supply the number of certifiable vehicles, which should push CPO’s share of franchise used sales closer to the 25-percent mark.”
Carfax announced Wednesday that it has broadened its role in General Motors’ certified pre-owned program.
With the expanded role, every certified Chevrolet, Buick and GMC vehicle will include a Carfax vehicle history report that consumers will receive for free from the selling dealer.
Also, Carfax Used Car Listings will include all CPO Chevy, Buick and GMC models up for sale.
The GMCertified.com website recently added the Carfax Snapshot tool to each vehicle-listing page.
Carfax said 36 brands (which includes Chevy, Buick and GMC) now use Carfax reports in their CPO programs.
“We’re proud to join forces with Chevrolet, Buick and GMC in making their customers’ CPO buying experience better than ever,” said Joe Koenig, vice president of Carfax. “Chevrolet, Buick and GMC have a long history of customer satisfaction and share in our commitment to transparency. Together, we’re making it easier for anyone shopping for Chevrolet, Buick and GMC Certified vehicles to find the one they love and connect with the dealer selling it.”
Doug Kaczmarski, national manager of GM Certified Pre-Owned, added: “In an effort to further raise our customers’ level of confidence and satisfaction, every Chevrolet, Buick and GMC certified vehicle now comes with a Carfax report. Nothing else builds buyer confidence quite like Carfax information. Along with exceptional quality and value, car buyers have yet another reason to choose Chevrolet, Buick and GMC certified.”
Carfax also noted that thousands of these GM CPO dealers have signed on to participate in the myCarfax Service Shop program.
“Why should I buy this vehicle with a CPO warranty over, say, anything else?”
If you’re a dealer on a franchised lot, you've most likely faced that question.
As part of Auto Remarketing’s annual “Best CPO Dealers in the United States” special edition, we connected with some of the top-selling franchised dealers in the CPO space, to get an inside view of what they do to move more certified units.
Audi Atlanta topped the charts for Audi CPO sales last year, moving over 50 percent more CPO vehicles than the next dealership on the list, with nearly 1,000 units sold in 2015.
AR reached out to Tracie Maloney, Audi Atlanta’s general manager and vice president, to see what the strongest quality of a CPO Audi vehicle is that their dealership emphasizes to CPO customers that seems to be a solid dealer-maker.
She pointed directly to just how simple and convenient it is to employ an Audi CPO vehicle’s warranty.
“The warranty is attached to the vehicle’s VIN number, which makes it a very smooth process when you take your vehicle in for a repair,” Maloney said. “You don’t need to have pre-approval on repairs or a paper contract. Consumers don’t have to go through the hassle of the aftermarket warranty companies that typically require these things. The dealer can simply pull up your vehicle by the VIN.”
Maloney also tipped her hat to her techs, who she says really are the backbone behind the inherent trust an Audi CPO warranty engenders.
“Another benefit to the consumer is the confidence you can have in that vehicle due to the very high standards set by Audi,” she said. “Our certified Audi technicians take pride in signing off on the CPO inspection books, which require minimum standards on things like tires and brakes.”
Here's the full list of Audi's top CPO dealers in the U.S. last year:
Best CPO Dealers: Audi
| Dealer |
2015 CPO Sales |
| Audi Atlanta |
976 |
| Audi North Houston |
624 |
| Audi Central Houston |
610 |
| The Audi Exchange |
592 |
| Audi Burlington |
556 |
| Santa Monica Audi |
537 |
| Keyes Audi |
531 |
| Audi Palo Alto |
490 |
| Audi Bellevue |
486 |
| Fletcher Jones Audi |
474 |
To check out the other dealers that sold the most CPO vehicles in 2015, as well as sales insights from the top stores from other brands, check out the “Best CPO Dealers in the United States” feature in the Feb, 15 edition of Auto Remarketing.
When FIAT Chrysler Automobiles shared its top 10 certified pre-owned dealerships for 2015, we noticed something interesting: Three of the top five stores were in Phoenix.
Bill Luke Chrysler Jeep & Dodge topped the list with 2,252 CPO sales last year, Airpark Dodge Chrysler Jeep was fourth with 1,041 CPO sales and AutoNation Chrysler Dodge Jeep was fifth with 985 certified sales.
So, what about this market makes it particularly viable for CPO? That's the question Auto Remarketing posed for its “Best CPO Dealers in the United States” issue.
“I believe Phoenix is strong in CPO because of the nature of our dealerships there — they are so process-oriented. All these stores are very organized, very modern, very efficient in the way they do business,” said Eric Swanson, head of certified pre-owned vehicles at FCA.
“It’s a highly-competitive market, and all these guys like to compete! I also appreciate the fact that these guys all look for ways they can improve and get better as opposed to spending on time coming up with excuses about why they can’t sell certified,” he said.
Don Luke — the dealer principal of the aforementioned No. 1 FCA CPO store, which was Auto Remarketing’s 2015 CPO Dealer of the Year, presented by NCM Associates — shared his thoughts as well: “The Phoenix market has large, high-volume dealerships and a huge recovering used-car market.”
Meanwhile, at Airpark Dodge Chrysler Jeep, used-car director Nathan Schwan said: “In our view, CPO sales have thrived because of our processes that we’ve put into place. There are two crucial elements we have implemented: One, possessing the right mix of inventory. Two, sales professionals that believe in the CPOV program. This can create success in any market.”
FCA's complete list of top 10 CPO dealers, based on full-year 2015 certified sales, is as follows:
1. Bill Luke Chrysler Jeep & Dodge | Phoenix 2,252
2. Stew Hansen Dodge City Jeep | Urbandale, Iowa 1,191
3. Cherry Hill Dodge Chrysler Jeep | Cherry Hill, N.J. 1,168
4. Airpark Dodge Chrysler Jeep | Phoenix 1,041
5. AutoNation Chrysler Dodge Jeep | Phoenix 985
6. Steve Landers Chrysler Dodge Jeep | Little Rock, Ark. 981
7. Huntington Beach Chrysler Dodge | Huntington Beach, Calif. 931
8. Yark Chrysler Jeep Dodge | Toledo, Ohio 924
9. Westbury Jeep Chrysler Jeep Dodge, Inc. | Jericho, N.Y. 917
10. Grogan’s Towne Chrysler Jeep | Toledo, Ohio 892
To read more from top CPO dealers throughout the country, check out the Feb. 15 edition of Auto Remarketing.
