In a positive sign for Canada’s used-car market, at least two automakers are reporting record certified pre-owned sales.
Mercedes-Benz Canada, for example, had record CPO sales in July, August and September, the company said when reporting quarterly sales results. It also hit record CPO penetration rates during each of these months.
Mercedes-Benz moved 4,119 certified units during the quarter, up 10.3% year-over-year. Its CPO penetration rate was up 4.2% year-over-year.
Overall pre-owned sales for Mercedes-Benz climbed 4.9% at 4,819 units.
Meantime, Hyundai Canada had its best September ever for CPO. It sold 1,200 certified vehicles for a 33% year-over-year gain. June and July were best-ever months for CPO at Hyundai, while August marked the strongest August ever.
“Fueled by a strong pre-owned market, September was another record-breaking month for Hyundai Canada’s H-Promise CPO program,” Charles Plewes, who heads up CPO and remarketing for Hyundai Canada, said in comments provided by email.
“We achieved sales of 1,200 units, up 33% from September last year and an all-time record for September. In addition, with a dealer participation rate of over 80%, more dealers are embracing the value of the H-Promise program every month.”
Next up, Subaru Canada increased its certified sales by 28.7%, moving 421 units in September. Through nine months, certified sales are up 6.4% at 3,209 units.
Nissan Canada moved 1,185 certified sales in September, up 4% year-over-year. Through three quarters, sales are down 27% at 8,472 units.
For Infiniti Canada, September CPO sales came in at 160, compared to 168 a year ago. It has moved 1,203 CPO units year-to-date, compared to 1,528 in the same period a year ago.
Hyundai Auto Canada Corp. posted its strongest August ever for certified pre-owned sales, moving a shade less than 1,300 units.
Calling it “another great month for Hyundai’s H-Promise CPO program,” Charles Plewes, who heads up CPO and remarketing for Hyundai Canada, said the 1,292 CPO vehicles sold by Hyundai’s Canadian dealers last month was a 27% year-over-year increase.
This performance follows what was two consecutive months of best-ever CPO sales for Hyundai Canada.
Its dealers moved 1,366 CPO vehicles during July, kicking off a strong start to the second half of the year.
Hyundai closed the first half by moving 1,246 certified vehicles in June, which was an all-time high.
Elsewhere, Nissan had 1,028 CPO sales for August, down from 1,561 a year ago. Year-to-date sales are at 7,287, down from 10,571 through eight months of 2019, according to results provided by the automaker.
Infiniti moved 145 CPO units in August, compared to 207 a year ago. In eight months, it has sold 1,043 certified vehicles, compared to 1,360 in the year-ago period.
It should be noted that August 2019 was an all-time record for both Nissan and Infiniti.
In addition to string of record sales at Hyundai Auto Canada Corp. reported here previously, more automakers shared signs of an improving certified pre-owned market in Canada.
At Subaru Canada, sales are down slightly year-to-date, but the program saw a major boost in July.
With 560 sales last month, certified was up 47.4% year-over-year for Subaru.
Year-to-date, it has sold 2,277 CPO units, down 1.6% from the first seven months of 2019.
Conditions have improved for the certified programs at Nissan and Infiniti following steep drops in the spring.
In July, Nissan sold 1,314 CPO units, which is even with year-ago figures. Year-to-date, sales are down 30% with 6,259 vehicles sold.
Infiniti moved 181 certified vehicles last month, down from 191 in July 2019. Year-to-date sales are at 898, a 22% decline.
“CPO (sales) are definitely on a recovery trend for both brands,” said Joel Gregory, who heads up CPO for Nissan and Infiniti in Canada, via email.
“Compared to last year, Nissan CPO sales were down 90% in April, 60% in May, 20% June and now July sales have finally caught up to the level last year,” he said. “For our Infiniti brand, CPO sales caught up to last year’s pace faster. By June 2020 Infiniti monthly sales had surpassed last June by 10%.”
Auto Remarketing Canada reported Tuesday that Hyundai has now had two straight months of record-high CPO sales.
Its dealers moved 1,366 CPO vehicles during July, said CPO and remarketing manager Charles Plewes via email, kicking off a strong start to the second half of the year.
“July was another great month for Hyundai’s H-Promise CPO program. For the second month in a row we achieved our best sales month ever in the history of the program, even surpassing June,” Plewes said via email. “More dealers than ever are embracing the value in the H-Promise program.”
Hyundai closed the first half by moving 1,246 certified vehicles in June, which was an all-time high.
It was a 26% year-over-year hike and it put the first-half total at 4,964 units. The year-to-date tally for the first half was down 3% from 2019.
Nissan Canada Finance president Alain Ballu says its new partnership with online auto marketplace CarGurus allows Nissan “to further maximize our successful Nissan Certified Pre-Owned program through a transparent and trusted digital environment.”
“At Nissan, we are constantly looking for new ways to reach and retain customers, while also enhancing the shopping journey for them,” Ballu said in a news release.
Ballu added, “This arrangement further supports our Canadian Nissan dealers with an increase in digital reach, lead volume, and ultimately, conversions.”
In announcing the partnership, CarGurus said Nissan Canada has joined Kia and General Motors in its Certified Pre-Owned Partner Program for the Canadian market.
Through the program, CarGurus said Nissan’s CPO vehicles will now be listed as manufacturer-certified on the CarGurus platform, “making the clear distinction that they are certified by the automaker.”
Now, directly from the CarGurus homepage in English and French, consumers will also be able to search CPO inventories.
The Nissan-certified vehicles will also be easily identifiable on the search results and vehicle display pages, according to CarGurus.
CarGurus said that because of Nissan’s “rigorous safety and maintenance inspections,” CPO certification will contribute to the CarGurus’ Deal Rating for each vehicle.
OEM-certified CPO feeds are automatically applied to any dealers currently listing their inventory on CarGurus in Canada. With CPO certification on CarGurus, some franchise dealerships can submit claims to OEM-co-op programs and get a partial to full refund for their CarGurus digital marketing spend.
“CarGurus is charged with improving the consumer experience of shopping for a vehicle, and we are excited to have Nissan join us in our efforts,” said CarGurus vice president of global business development Rory Edwards.
Edwards continued, “Nissan shoppers will now have more transparency into the vehicle options offered by their local dealers and a better site experience on CarGurus, ultimately bringing our dealers better informed customers.”
Certified pre-owned programs offer a great opportunity to increase your gross. However, the word certified means different things to different people, which creates confusion for customers and challenges for dealerships. What does a customer really want when they’re looking to buy certified, and how can you make your certified vehicles stand out?
Through our research, Driving Insights has learned what certified buyers want, how to bring more of them into your dealership, and how to help undecided customers realize a certified vehicle is right for them.
Certified pre-owned customers are made, not born
Most customers become convinced that CPO is right for them during their shopping process.
Only 28% of CPO buyers start their search exclusively looking for a CPO vehicle — the remaining 72% are interested in a variety of vehicle options, then decide on buying CPO towards the end of their car buying journey.
What makes a customer decide on certified pre-owned?
When considering all the features that come with CPO, buyers rate the thorough inspection as most important. Knowing the vehicle has passed the inspection assures consumers that, although the vehicle is used, it is in top current condition.
After that, customers are more interested in the increased confidence and peace of mind CPO gives them about their vehicle choice, and the belief that the vehicle is in better condition overall than a regular used car.
The CPO is greater than the sum of its parts
Buyers want CPO because buying a used car can be scary, and CPO provides confidence that they’re driving away in a vehicle that is a better choice than a regular used car.
This means that while the various components of a CPO program are important, what really matters is the overall feeling the CPO program creates.
To bring more CPO customers into your dealership or convince someone that CPO is the way to go, bring out the inspection and explain the program in a way that shows how all your CPO features come together to mean they’ll drive away feeling confident about their decision.
Bonus: When price is more important than confidence
Ok, so what if you’ve tried all this and the customer still wants a regular used car?
Despite the confidence CPO programs provide, there are still customers who aren’t interested in the peace of mind created by CPO and prefer to pay the lowest price possible. How can you change their minds?
When a regular used car shopper decides to upgrade to CPO, it’s because they realize that CPO vehicles are in better condition. And better condition now means spending less money in the future. Educate these price-sensitive customers on how much they could save in the long run by buying a vehicle that has met stringent certification requirements and passed your inspection. They’re not paying more, they’re getting a better value.
Drew Harden is manager of research & insights at CARFAX Canada. Driving Insights is an information series designed to help used car dealers better understand the motives and behaviors of Canadian used car buyers. The research, designed by CARFAX Canada and executed by Dynata, is based on the most pressing questions of dealership management and staff across Canada, answered through a national survey of 1,000 Canadians who recently bought a used car from a dealership. If there’s a question you’d like us to address, email insights@carfax.ca and we’ll get you some answers.
