The November certified pre-owned sales total fell more than 4 percent from year-ago figures, according to Autodata Corp., but year-to-date sales are moving nearly 9 percent higher with 2.33 million CPO sales through 11 months.
There were 184,080 CPO sales in November, which was off 4.7 percent year-over-year and down 13.8 percent month-over-month, Autodata said in a sales recap Wednesday.
Granted, November had two fewer selling days (at 23) than the same month a year ago, and five fewer selling days than October, the firm noted.
With that, the month’s daily selling rate (8,003) beat that of November 2014 (7,724) and October of this year (7,629).
As for the year-to-date sales tally, that’s up 8.7 percent year-over-year.
Brand-by-brand results
Before industry-wide numbers were released, several individual programs shared their sales for the month.
Kia had its best November ever with 4,513 CPO sales, a 5.91-percent year-over-year improvement.
Through 11 months, Kia has sold 58,451 certified vehicles for a 31.3-percent gain.
BMW reported 8,388 CPO sales for the month (down 4.9 percent) and 104,727 CPO sales year-to-date (up 12.6 percent). MINI had 812 CPO sales in November (up 3.8 percent) and is at 10,640 sales year-to-date (up 24.2 percent).
Mercedes-Benz sold 9,406 certified vehicles in November, pushing the year-to-date figure to 108,635, which is 0.8 percent ahead of the pace through November 2014.
At Ford, its CPO programs combined for 22,371 sales in November, compared to 22,552 in November 2014. Through 11 months, they have sold 270,194 CPO units, against 249,095 certified sales in the year-ago period.
Mazda sold 2,631 CPO cars last month, versus 3,593 certified sales a year ago. Year-to-date sales have reached 36,019, down from 39,484 through November 2014.
Volkswagen had 5,224 certified sales in November (down 33.3 percent year-over-year), and its year-to-date sum is at 81,504 CPO sales (down 3.7 percent).
Volvo moved 1,351 CPO units for the month, compared to 1,107 in November 2014. Through 11 months, there have been 18,354 certified Volvo sales, up from 12,881 during the year-ago period.
Hyundai sold 6,671 certified vehicles in November (down 18 percent) and has moved 86,627 CPO vehicles year-to-date (down 1.3 percent).
Certified pre-owned sales reports for November are just now beginning to surface, but here’s an early look at how some brands fared last month:
At Ford, its CPO programs combined for 22,371 sales in November, compared to 22,552 in November 2014. Through 11 months, they have sold 270,194 CPO units, against 249,095 certified sales in the year-ago period.
Mazda sold 2,631 CPO cars last month, versus 3,593 certified sales a year ago. Year-to-date sales have reached 36,019, down from 39,484 through November 2014.
Volkswagen had 5,224 certified sales in November (down 33.3 percent year-over-year), and its year-to-date sum is at 81,504 CPO sales (down 3.7 percent).
Volvo moved 1,351 CPO units for the month, compared to 1,107 in November 2014. Through 11 months, there have been 18,354 certified Volvo sales, up from 12,881 during the year-ago period.
Hyundai sold 6,671 certified vehicles in November (down 18 percent) and has moved 86,627 CPO vehicles year-to-date (down 1.3 percent).
This evening, another round of the College Football Playoff rankings will be released, with teams (OK, arguments aside) ordered based on how they stack up against the rest.
Much like college football on the sports landscape, certified pre-owned is crazy popular in automotive. But how would they stack up in a top 10 ranking?
Edmunds.com tackled that question last week in an article by new- and used-car editor James Riswick.
His story ranks the programs based on how they “provide CPO benefits that exceed the industry norm.”
According to the Edmunds post, written by Riswick, here’s how the programs line up:
1) Hyundai
2) Kia
3) Lexus
4) Volvo
5) Honda and Mazda (tie)
6) Porsche
7) Jaguar and Land Rover (tie)
8) Buick
So why did Edmunds pick these 10? Find out why in Riswick’s full story.
A year ago, if you were to consider used-car shoppers familiar with certified pre-owned, just under three-fourths of them would have expressed a positive opinion about CPO.
This year? That jumps to 82 percent, according to the 2015 Autotrader CPO Study.
Or, as Isabelle Helms said during her presentation at last week’s CPO Forum, “perceptions of CPO are going through the roof.”
Helms, who is vice president of research and market intelligence at Cox Automotive, went over the findings of this study in great detail during her Nov. 17 presentation at Used Car Week.
Part of that included the great opportunity that exists in CPO.
You might even say that begins with bread-and-butter of CPO supply: off-lease inventory, which Helms said is at an all-time high. Citing Manheim Consulting data, her presentation shows off-lease inventory reaching a trajectory of 4 million units towards the end of the decade.
Another key point of her presentation, though: With all this incoming, will demand keep pace? Again, the potential is there for that happen. Citing Manheim Consulting, the expectation is for annual CPO sales to be at 3 million in 2017.
But even so, CPO has some untapped resources.
Namely, used-car shoppers.
The presentation indicates that 75 percent of new-car shoppers were familiar with CPO in 2014, a number that has since risen to 77 percent.
But only 45 percent of used shoppers were familiar with CPO last year. And while there has been improvement, familiarity is still only at 49 percent.
So, when you consider the numbers shared at the beginning of this story, it’s understandable why Helms emphasized that the “big opportunity for CPO lives among used-car shoppers.”
And here’s another nugget that illustrates the potential among the used-car shopper: consideration for CPO has climbed from 50 percent in 2014 to 68 percent this year.
Not to mention, 82 percent said they would be open to “moving up” to a certified car if the conditions were right.
So, which of these used-car shoppers are most ideal for moving to CPO? More on that later.
Luxury brands are dominating the CPO market this fall, as many consumers see certified luxury vehicles as an entry-way into the more high-end brands.
According to Autotrader’s October Trend Engine data, which measures shopping activity on Autotrader.com every month, luxury brands are the most popular nameplates among CPO shoppers.
And the trend didn’t just pop up in October. Over the past three months on the site, luxury car, luxury SUV and sports car segments outperformed their mainstream counterparts, such as compact and mid-size cars and SUVs, according to the site’s data. For example, the compact car segment saw market share fall this month to 7.60 percent from 7.87 percent in October. On the other hand, the luxury car market share is currently at 22.69 percent.
This past month, six of the top 15 certified models on the site that saw the biggest growth in market share from September were entry-luxury or luxury brands, including Audi, BMW, Bentley, Infiniti and Mercedes-Benz.
- The Audi RS models saw a 23.5 percent increase.
- The Bentley Continental was up 14.5 percent.
- The Infiniti Q-Series saw a 14-percent gain.
- The BMW 4 Series was up 12.3 percent.
- The Mercedes-Benz SL Class bumped up by 11.8 percent.
Autotrader, the sponsor of the CPO Forum, part of the Used Car Week Conferences, shared much of this analysis and more at the event which was held Monday and Tuesday at The Phoenician in Scottsdale, Ariz.
Michelle Krebs, senior analyst for Autotrader, explained why she thinks luxury CPO vehicles are gaining ground: "Both aspirational and economic forces appear to be at work simultaneously in the CPO space.
"Despite fluctuations in the stock market and predictions of a hike in interest rates, this data shows consumers are increasingly interested in well-appointed, status brands but with the added peace of mind, cost certainty and affordability that certified pre-owned vehicles provide,” she continued.
The 2015 Autotrader CPO study also uncovered that millennials may be one demographic pushing luxury CPO sales higher. This demographic aspires to buy luxury brand vehicles, Autotrader found, but many can’t shell out what’s required for a new luxury car.
Autotrader called CPO luxury vehicles a “bridge” for consumers to crossover into the brands they desire, even before they can afford a brand new car.
If you need convincing of the CPO market’s importance to the used-car industry, check out this stat: In October, Autotrader site activity showed the proportion of used-car VDPs going to CPO increase by nearly 10 percent year-over-year.
Autotrader analysts shared that in light of the record flow of off-lease vehicles expected to hit the market next year — an increase of 800,000 in lease maturity volume in 2016, according to J.D. Power — automakers should look to the CPO market as a way to market this influx of vehicles.
Krebs said, "Given the surplus of low mileage, late model used cars that are and will continue to be abundant, we're advising all our OEM clients to ensure they are certifying enough of their eligible inventory now to start winning customer loyalty and repeat purchases sooner rather than later."
And the certified pre-owned market has already eclipsed 2 million sales for 2015, which appears to be the fastest the industry has ever reached this mark in a year.
Autodata Corp. said that the year-to-date CPO sales tally through 10 months is at 2.14 million, a full 10 percent ahead of last year’s pace.
Continuing the awards doled out at Used Car Week, both Vincentric and IntelliChoice recognized top automaker certified pre-owned programs Tuesday during the CPO Forum portion of the week-long conference series.
Starting with the 17th annual IntelliChoice Certified Pre-Owned Car Awards, the Best Premium Program Award went to Jaguar, while Kia was honored with the Best Popular Program Award.
A grand total of 26 OEM programs (12 premium, 14 popular) were evaluated this year in nine areas. IntelliChoice analyzes such things as extended manufacturer warranties, pre-owned ownership costs, the thoroughness of the inspection process and special finance incentives.
“IntelliChoice has been tracking monthly CPO incentives for a couple of years and this year placed extra emphasis on the incentives being provided to the consumer,” IntelliChoice’s Eric Anderson said in the news release announcing the awards. “Jaguar and Kia both edged out Volvo and Hyundai for the best programs by having better special financing offers over the last year.”
The complete list of IntelliChoice’s CPO winners for 2015 is below:
Best Premium Program Award: Jaguar
Best Premium Warranty Award: Volvo
Best Premium Brand Used Ownership Costs Award: Lincoln
Best Popular Program Award: Kia
Best Popular Warranty Award: MINI
Best Popular Brand Used Ownership Costs Award: Toyota
Vincentric Awards
Also announced Tuesday were Vincentric’s CPO awards. Audi, Ford, Honda and GMC were all recognized with awards in key vehicle categories.
- Ford was honored as the Vincentric Best CPO Value in America award winner for the SUVs, crossovers and vans categories.
- Honda took how the title of best CPO value passenger car brand.
- Audi notched the best CPO value luxury brand award.
- GMC earned recognition as the best CPO value truck brand.
Toyota also had a good showing with seven models earning Vincentric CPO awards. Nissan had five individual winners.
“The Vincentric Best CPO Value in America awards offer insight to those trying to understand which certified pre-owned vehicles provide the best value in today’s market,” said David Wurster, president of Vincentric. “Low cost of ownership is fundamental to providing great value, and these awards have been created to enlighten potential buyers as to which vehicles offer the best value.”
Taking a look at Vincentric’s methodology, the company analyzed over 15,000 vehicle configurations, using eight cost factors including depreciation, fees and taxes, financing, fuel, insurance, maintenance, opportunity cost and repairs.
Using a statistical analysis, the company identified the Vincentric Best CPO Value in America winners by measuring which vehicles had lower than expected ownership costs given their market segment and price, the company explained.
To view the full list of the Vincentric Best CPO Value in America awards, see www.vincentric.com.
Since humble beginnings in the early-to-mid 1990s, the certified pre-owned business has picked up steam in the past decade or so, particularly in the last five years.
Autodata Corp. data indicates that 2011, 2012, 2013 and 2014 were each record-breaking years for CPO, and 2015 is on pace to be an all-time high, as well.
So, what factors over the last couple decades have pushed CPO to its current level, where it’s growing and setting records every year?
There are a few factors at play, says Steve Lind, who is the executive vice president of operations at Cox Automotive Media Group.
For one, he said, luxury automakers have rolled out more vehicles that would be considered “entry-level,” at least from a luxury standpoint.
Having hese additional options can increase the number of luxury car owners, adding to the strong product coming back into the used market. Thus, dealers have additional luxury vehicles to use in CPO inventory, Lind said. And having that CPO customer can lead to a new-car customer down the road.
Manufacturers have also come to realize the importance of certified, in that it can support residual values, which in turn can support new-car sales.
“That just helps the whole system. So I think there’s been investment there,” Lind said.
“And I think that the consumers and their shopping patterns tell us that they’re becoming increasingly aware of it,” Lind said, “understanding what I’m getting for the certification process, a greater trust in knowing how near-new this thing is, and what it means (to be covered) all the way out to 100,000 miles.”
Lind was talking with Auto Remarketing during a media visit last month at Cox Automotive headquarters in Atlanta. During our discussion, he also pointed out that people are holding on to their cars longer. With the kind of economic and spending mindset that consumers often have, buying CPO often makes sense for buyers looking to make their vehicles last.
The cost-to-own element of certified is not one to be overlooked. The “value of the vehicle’s ownership over time” should be part of the educational conversation, Lind said, particularly as many Americans are “conscious of our discretionary spending.”
And many consumers, he said, make shopping decisions based on monthly payments.
“You can get a darn-near-new vehicle, perhaps in a class above what you were looking for, at a monthly payment you can afford inside the CPO (program),” Lind said.
It’s not just more affordable in terms of being a lower price car at time of purchase than a new ride, he noted. The savings can also come from the lower depreciation cost for the consumer who is buying the CPO vehicle.
He explained that the 2- or 3-year-old certified vehicle has “gone through most of its depreciation cycle” already.
So, the consumer buying that car isn’t going to really feel that hit during the time he or she actually owns the car.
And Lind believes the industry can do a “better job” at communicating this.
The affordability factor also ties into what Lind says resonates with shoppers about CPO.
“I think they value greatly that they know this (car) should be a lower cost-to-own vehicle over time for me. This is certified. If I have a problem, I’m covered,” Lind said. “I think that matters even more to people.
“I do think, also, there’s been a better marketing/educational effort, both by the providers of the certification and partners like us and (those) similar to us to provide better ways for people to shop and become aware of the CPO product and what it means to own (a CPO car),” he added. “I think those coming together has produced awareness and confidence in the buying process, for sure.”
The certified pre-owned market has already eclipsed 2 million sales for 2015, which appears to be the fastest the industry has ever reached this mark in a year.
Autodata Corp. said Wednesday that the year-to-date CPO sales tally through 10 months is at 2.14 million, a full 10 percent ahead of last year’s pace.
To put that in perspective, in the entirety of 2013, there were 2.11 million certified sales.
As for the most recent month, there were 213,615 CPO sales for October, which beats the year-ago figure by 5.5 percent, according to Autodata.
Not to mention, three best-ever months were reported: FCA Group, Lexus and Subaru.
Perhaps the only real negative for the month was that the daily selling rate (7,629) was a bit sluggish compared to other months of 2015. It beat the year-ago pace by 1.8 percent, but fell 10 percent month-over-month and was the second-slowest DSR of 2015, according to Autodata.
And even that takes into account that there were 28 selling days.
The math (and path) to 2 million
In 2013, there was a total of 2.11 million CPO sales for the year, according to Autodata numbers previously reported in Auto Remarketing. This was the first time the industry had sold 2 million or more certified vehicles in a year.
Given that there were 171,280 certified sales in December of that year, the 2 million mark had to have been reached in the year's final month.
Last year, the 2 million mark was reached in November — that month's CPO sales tally of 192,952 pushed the year-to-date sum (through 11 months) to 2.14 million. There ended up being a grand total of 2.34 million certified sales in 2014.
Breakdown by automakers
The Big 3 sold 76,641 CPO units in October, relatively steady (up 0.8 percent) from the prior year. Through 10 months, they have moved 781,960 certified vehicles for a 13.6-percent gain.
Asian-brand CPO sales reached 101,783 for October (up 10.8 percent), with the yearly tally moving closer to 1 million at 990,199 sales (up 8.1 percent).
There were 35,191 European-brand CPO sales for the month (up 1.8 percent), and the year-to-date sum is at 370,346 (up 8 percent).
Update on Tesla CPO
Elsewhere in the CPO market, there’s been some media and industry buzz about Tesla’s certified pre-owned program.
In the company’s third-quarter shareholder letter, Tesla gave an update on its CPO offering.
According to the letter, the number of pre-owned Tesla vehicles sold in Q3 exceeded the number of customer trade-ins received, which resulted in a 17-percent reduction in trade-in unit inventory.
Staff writer Sarah Rubenoff contributed to this story.
If you’re hungry for some certified pre-owned sales data (and really, who isn’t?) and can’t wait until industrywide numbers are reported, here’s an early rundown of folks sharing October results thus far.
Kia posted had its best October ever for CPO, with 5,025 sales. This was up 17.57 percent year-over-year. In 10 months, Kia has sold 53,938 certified vehicles, up 34 percent from last year's pace.
There were 9,629 Mercedes-Benz Certified Pre-Owned sales in October. Through 10 months, sales are at 99,373 units.
BMW reported a 12.3-percent year-over-year hike in certified sales, with 9,572 sold last month. Through October, BMW has posted 96,339 CPO sales (up 14.4 percent).
The MINI division achieved its best-ever October for CPO, having sold 999 cars for a 43.1-percent hike. There have been 9,828 certified sales for MINI so far this year (up 26.2 percent.)
Over at Hyundai, CPO sales were at 7,979 units in October (down 5.2 percent) with year-to-date sales up 0.4 percent at 79,956.
Volkswagen saw its certified sales fall 22.6 percent in October, with 6,055 cars sold. Through 10 months, sales are at 76,280 units (down 0.7 percent).
However, sales for its Beetle Sedan climbed 15.1 percent in October, with Touareg sales up 9.5 percent.
Audi sold 4,061 CPO units in October.
Porsche reported 1,375 certified sales for the month, an increase of 31.2 percent.
For the past four years, Auto Remarketing has published a magazine each February that recognizes the best-selling certified pre-owned dealers in the U.S.
Essentially, the top 10 CPO dealers for each participating program (based on the previous year’s sales) are recognized.
Bill Luke Chrysler Jeep Dodge & Ram did not make its automaker’s top 10 list the first year, but has since placed fourth among the automaker’s dealers for 2012 sales (683) before notching back-to-back years as the OEM’s top-selling CPO dealer.
And all signs point to that streak extending to three consecutive years of certified sales leadership.
The dealership sold 1,520 certified vehicles in 2013 and then sold 1,771 last year.
According to numbers from Fiat Chrysler Automobiles U.S., Bill Luke moved 1,577 certified vehicles through nine months of 2015 to lead the automaker’s dealer body yet again.
It’s this kind of consistency that has earned Bill Luke Chrysler Jeep Dodge & Ram the title of 2015 Auto Remarketing CPO Dealer of the Year, which is presented by NCM Associates.
The dealership sells roughly 500 used vehicles a month and certifies every Chrysler vehicle that it can — “Period,” says dealer principal Don Luke.
“To us, it’s a marketing tool; it’s not necessarily like some people do it, to try and get more money for the car. To us, it’s strictly a marketing tool,” Luke said. “When they look at a Chrysler product … if we’re competitively priced and they also get a certified car — with warranty, etc. — then they come to me.”
This year, Luke said, the dealership is “running a little ahead on CPOV, because our volume’s up a little,” with certified sales reaching between 190 and 200 a month.
“And we’re carrying more inventory. And, of course, that’s driving more sales,” he said.
Oddly enough, though, Luke said supply was actually a bit tight when Auto Remarketing talked with him in mid-October.
“It’s a conscious effort to get out and have buyers constantly searching, working five, six different auctions at any given time,” Luke said. “I would say that they’ve put a lot more energy into buying cars.”
The dealership also has two people dedicated simply to go online and buy cars. What’s more, Luke says, used-car director Jody Knaub will often have two screens up at the same time, buying cars online.
“So, it’s really a conscious effort of going out and literally buying cars,” Luke said. “But you’ve got to seek out vehicles that will work for you in your market and are priced right. And that’s a real key thing. You can always buy cars. But they have to be priced right or you’re dead.”
If fact, Knaub said that “sourcing has been the biggest struggle” on the CPO side this year.
The dealership is a big supporter of the Velocity Method of Management program from vAuto and its founder Dale Pollak — which vAuto’s website describes as an “investment-based inventory management philosophy.”
With that in mind, the price-point is particularly important for the store, Knaub said.
“So, I can go out and buy 150 cars today, but that doesn’t make them 150 good cars, if you will, that fit our model,” he said.
The dealership aims to turn at roughly a 30-day average, Knaub said, and the challenge is to find enough inventory that would allow them to turn as fast as possible.
For help in decision-making when it comes to market day supply, price-to-market and general exit plans, the dealership turns to vAuto data, he said.
Knaub emphasizes the importance of discipline in sticking to this turn-time, “aggressive” as the business model may be, he says. Averaging a 30-day supply and average day-to-sale means the store has to be especially mindful of purchase price.
“If you pay too much, you’re just buying loss,” Knaub said. “And that’s what I tell my guys, every time you do that, you buy a loss … that’s obviously not the goal here.”
And that, Luke says, is why the dealership has such resources devoted to buying the right cars.
“We’re looking at auctions everywhere,” Luke said. “We’re looking for stuff that’s priced right.
“We’ll buy cars that won’t get here for a week, and they could be coming from three states away,” he added.
In fact, that actually “just happened,” Luke said.
The store didn’t have much in the way of reconditioning work to finish, and the shop was able to catch up and slow down, Luke said.
Then, more than 100 units arrived from earlier purchases.
“We went from famine to feast,” Luke said.
As far as education and discussing the features and benefits of CPO, Knaub said the store does hold sales staff meetings regularly on that, and may have a representative visit to discuss the topic, plus the monetary value CPO can bring.
But he said the store focuses more on efficiency than it does CPO amenities.
“When you run on that turn, it’s all about us being efficient,” Knaub said. “I think CPO fits right into the program.”
The sales staff has also appreciated the reconditioning that goes into the CPO vehicles, Knaub said. The dealership aims to recon the car so that it’s “above-average” quality.
“I think a lot of the employees actually appreciate and benefit from the fact … that once it hits the road, we don’t have to have that car coming back for further reconditioning, because it’s a good quality car that we’ve got in to a place where we shouldn’t have to see it until its first oil change,” Knaub said.
Don Luke and the dealership will be presented the CPO Dealer of the Year award at 4:05 p.m. on Nov. 16 during the CPO Forum, which is one of four industry-leading conferences making up Used Car Week in Scottsdale, Ariz.
Luke will also be among the panelists for the “Top 10 Best CPO Ideas” discussion taking place at 10:30 a.m. on Nov. 17 during the CPO Forum.
And at the National Remarketing Conference portion of Used Car Week, Luke will participate on “The National Panel: Opportunities and Hurdles Facing the American Used Car Industry in 2016.”
That panel is scheduled for 11:15 a.m. on Nov. 19.
