While maintaining its forecast for overall used-car sales, Cox Automotive has trimmed its projections for certified pre-owned vehicle sales, as competition for acquiring CPO-worthy inventory intensifies.
Analysts with the company said in a presentation this week that they are now projecting 2.8 million CPO sales for 2022, down from the 3.0 million unit forecast they made earlier this year.
Cox Automotive chief economist Jonathan Smoke says the revised forecast is due to …
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Our episodes of the Auto Remarketing Podcast from NADA Show 2022 roll on with a conversation about certified pre-owned vehicles.
Senior editor Nick Zulovich spent time in Las Vegas with Elliot Schor, who is vice president of sales with JM&A Group, which recently launched a program in collaboration with J.D. Power aimed helping franchised dealerships certify vehicles that aren’t manufactured by their brand.
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.
It appears the certified pre-owned vehicle market may have turned a corner last month.
Snapping a six-month decline, February CPO sales of 191,860 units beat January figures by 15.3% and marked the highest monthly sum since October, according to a Data Point report from Cox Automotive.
The Cox data, citing Motor Intelligence, indicates last month’s CPO tally was still close to 8.5% softer year-over-year.
And it’s still softer than pre-pandemic CPO sales of 238,223 units in February 2020 and 211,514 CPO sales in February 2019, according to the Cox analysis.
However, the company …
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The 7 millionth Toyota certified pre-owned vehicle to be retailed through the automaker’s program recently rolled over the curb at Holman Toyota in Mount Laurel Township, N.J.
Toyota said on Monday that the vehicle marking this milestone for the CPO program that launched in 1996 was a 2019 Toyota Camry acquired by Wayne Maver Jr., a 20-year-old from Vincentown, N.J.
To celebrate the purchase, Toyota presented Maver with a check for the total purchase price of the Camry. Maver also was presented with a $1,000 gas card from Carfax and given a four-year/55,000-mile maintenance plan.
According to a news release, the dealership and automaker also made a $5,000 donation in Maver’s name to the American Bladder Cancer Society, an organization dedicated to raising awareness of bladder cancer and advocating for research into a cure, treatment, early diagnosis and quality of life issues of survivors.
“I wasn’t expecting anything like this,” Maver said during the check presentation. “I purchased this Camry because of its reliability, and I knew it would last a long time. Now knowing I don’t have a car payment is just incredible, especially as I’m just starting my career.
“I have an uncle that battled bladder cancer, so Toyota making the donation to the American Bladder Cancer Society means as much to me as paying off my Camry,” he added.
A ceremony was held at Holman Toyota on March 8. Representatives from Toyota presented Maver with a check and hosted a celebration for dealership personnel.
“We were incredibly proud to be a part of this milestone for Toyota and continue the legacy of leadership in the Certified Pre-Owned industry, as well as have an opportunity to give back to our local community,” Holman Toyota general manager Michael Schwab said in the news release. “This is a testament to the value and reliability of Toyota vehicles and our commitment to delivering the very best for our customers.”
Volvo Cars Mall of Georgia is a little over four years old, and the store’s team has had a focus on certified pre-owned sales since its opening. The work paid off: the store is excelling at CPO.
Volvo Cars Mall of Georgia sold 662 certified pre-owned Volvos in 2021, making the dealership the No. 1 CPO seller for Volvo in the country. In a difficult used-car market — and as the COVID-19 pandemic lingered — the store’s CPO sales continued to …
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Market conditions in the early days of 2022 aren’t exactly ideal for certified pre-owned vehicle sales.
Off-lease vehicles, a primary source of CPO inventory, are slim pickings, and the combination of high acquisition and certification costs vehicles makes it a pricier option for many dealers.
That’s according to Friday's Data Point report from Cox Automotive, which said certified sales were down close to …
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The final numbers have been tallied, and it turns out that last year’s certified pre-owned sales fell short of the record high by just over 2%.
That’s according to a Data Point report from Cox Automotive, citing an analysis of Motor Intelligence data.
There were 2,748,164 certified sales in 2021, which beat prior-year figures by 5.4% but was 2.2% lower than the record year of 2019, the report said.
However, Cox Automotive is projecting 3.0 million CPO sales this year, which be an all-time high and the 10th such record in the last dozen years.
“We lost ground in the last part of 2021, but we are forecasting a record in 2022,” Cox Automotive chief economist Jonathan Smoke said in the analysis. “The demand is there, and CPO fits a very important sweet spot. It is the best alternative to a new vehicle.
“It’s something that is a win for the manufacturer, and many manufactures are focused on CPO as a strategic segment to introduce consumers to their brands. Consumers who have good credit and qualify for certified pre-owned loans see substantially better terms or rates that make a big difference in their payment and that more than compensates for the higher price of a certified pre-owned unit. And it’s a win for the dealer because on average they are commanding a higher price and higher margin even with the higher certification cost.”
But while the demand for CPO is strong, the well may soon run dry on worthy supply.
In fact, the number of off-lease vehicles (which tend to be prime candidates for CPO programs) entering the wholesale market is likely to fall from 4.0 million in 2021 to 3.9 million in 2022 and then drop to 3.3 million for 2023. The forecast for 2024 is 3.5 million.
“Off-lease vehicles are normally the largest source of commercial vehicles sold at auction. While the total number of leases scheduled to terminate remain near record highs, the number making their way into auction sales channels are at record lows,” Manheim Consulting vice president Kevin Chartier said during an industry conference call.
“This is due to the incredible surge in resale values and the corresponding increases in the equity positions of the terminating lease vehicles. Normally, 60% or more of the terminating leases find their way into the wholesale used-vehicle market,” Chartier said. “However, with today's tremendous equity position, the vast majority of these vehicles are being purchased at lease termination and prior to entering the wholesale market, leaving less than 15% of the normal volumes heading to the auction in the fourth quarter of the year.”
Lower supply, particularly for the CPO-friendly off-lease variety means this year is likely the last record year for the market.
“We’re a little bit down on lease maturities. So, there’s enough volume to give us a record in 2022 and that's what we're forecasting,” Smoke said during the call. “But it’s probably going to be the last year we can set a record, because the declining lease maturities going forward after 2022 is going to make that much harder to pull off. But we definitely see the demand and the supply there for one more year.”
There were 186,748 CPO sales in December, which was up 3% from November but down 19% from December 2020.
During the conference call, Kayla Reynolds, who is the economic and industry insights manager at Cox Automotive, said that over the course of autumn, the certified pre-owned market went from appearing like it would beat the 2020 and record 2019 sales volumes, to a market slowing down from the omicron variant of COVID-19 and the ongoing pandemic.
General Motors is looking for another way to incentivize potential buyers of its certified pre-owned vehicles.
On Monday, the automaker launched the all-new My GM Rewards loyalty program for Chevrolet, Buick, GMC and Cadillac customers, with part of the rewards being the potential assistance toward delivery of a certified vehicle.
The loyalty program features three membership tiers and new ways to redeem, unlocking a new world of appreciation for rewards members.
Monday also marked the launch of the all-new My GM Rewards Card, in collaboration with Marcus by Goldman Sachs and Mastercard.
The all-new My GM Rewards starts with easy, no-cost signup for any current or past Chevrolet, Buick, GMC or Cadillac customers. With three membership tiers — Silver, Gold and Platinum — customers can level up as they spend.
The automaker said each tier unlocks higher points earnings and redemption caps. Gold and Platinum rewards members now can redeem points toward the purchase of GM certified pre-owned vehicles and their points do not expire.
GM also highlighted the expanded program can allows members to earn and redeem points toward buying or leasing a new GM vehicle, as well as for parts, accessories, paid certified service, and select OnStar and connected services plans.
In addition to unifying with the My GM Rewards Card, the new My GM Rewards also eases the customer experience by integrating with online accounts and mobile applications used by Chevrolet, Buick, GMC and Cadillac owners.
Customers can manage their My GM Rewards accounts within their existing online account and mobile apps, with no need for an additional or unique account nor password.
My GM Rewards originally launched in 2018, as the one of industry’s first automotive rewards-based customer loyalty program. Today more than 6 million GM customers are part of My GM Rewards.
“For six consecutive years GM has been recognized as having the Highest Overall Manufacturer Loyalty by IHS Markit, driving us to create an all-new My GM Rewards that greatly enhances the ownership experience,” said Julie Heisel, director of GM Rewards and GM Card.
“The new My GM Rewards is a big win for our customers with more ways to earn and redeem points, including premium tiers of membership with exclusive offers and opportunities,” Heisel continued in a news release.
The numbers are not yet final, but it appears 2021 will not end up as a record year for certified pre-owned vehicle sales.
However, there will likely be a best-ever 3.0 million certified vehicles sold in 2022, in what is expected to be the finale of peak CPO.
That’s according to Cox Automotive analysts who shared their analysis on CPO and other areas of the used-car industry in a wide-ranging conference call Friday around the latest Manheim Used Vehicle Value Index.
Kayla Reynolds, who is the economic and industry insights manager at Cox Automotive, said that over the course of autumn, the certified pre-owned market went from …
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It’s coming down to the wire in certified pre-owned.
For 2021 to match the best-ever year for CPO sales (which happened in 2019), dealers will have to sell more than …
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