Compared to a new vehicle, a certified pre-owned vehicle purchase can be a more attractive and affordable alternative for consumers interested in driving both mass-market and luxury vehicles.
All month long, Cars.com has voiced strong consumer demand for CPO vehicles, noting that dealers have an opportunity to attract more of these buyers, as part of the site's second annual Cars.com CPO Month.
Dealers who certify anywhere from 75 percent to 100 percent of their inventory note that consumers either always or often ask about CPO vehicle options, according to Cars.com.
In an emailed Q&A with Auto Remarketing, Cars.com senior research and insights analyst Michael Solheim, explained what CPO shoppers desire most, as well as how they differ from both new and used-car shoppers.
What shoppers value most
The extended warranty, as well as the peace of mind that comes with it, are the most influential CPO attributes that appeal to car shoppers who consider a CPO vehicle, Solheim explained.
“In fact, 59 percent of shoppers rank this as either the No.1 or No. 2 most important aspect of certified pre-owned programs,” said Solheim, citing a recent Cars.com study on CPO shoppers.
Additionally, Solheim explained that when it comes to a CPO buyer's next car purchase, some car shoppers will want to find another CPO, while others will often desire a new vehicle.
“There’s no solid rule here since the reasons for buying CPO differ,” he said. “For some shoppers, they’ve been burned in the past by an unreliable used vehicle, and they see certified pre-owned to be a way to avoid the risk. In these cases, they will often re-buy another CPO — especially if they have a good experience with the first CPO vehicle.”
Solheim holds that CPO shoppers interested in luxury vehicles can get to experience a vehicle that might be unattainable for them new.
“CPO is a means to buy a luxury brand that would otherwise be out of reach. In those cases, as their buyer power increases, they will move up to a brand new vehicle for their next purchase," Solheim said.
More time for the car-buying journey, cross-shopping
Using metrics from its site, Cars.com found that CPO shoppers typically spend more time purchasing than used-car buyers, but not quite as long as new-car buyers.
CPO shoppers take approximately 47.34 days to purchase a car, compared to 46.86 days for used-car shoppers and 48.5 days for new-car shoppers, according to Cars.com latest Consumer Metrics report, which took a look at the journey of car shoppers from January to April this year.
The report also found that both CPO and used-car shoppers are more likely to be motivated to make a purchase after doing research online.
Cars.com data suggests that because CPO shoppers research their car purchases longer than used-car shoppers, CPO shoppers are often well-informed and prepared to make a selection within the next month or the next week.
After researching online, about half of CPO shoppers are ready to buy a vehicle either within the next month or the next week, compared to just 31 percent of used-car shoppers and 41 percent of new-car shoppers.
Shoppers of certified pre-owned vehicles particularly enjoy cross-shopping across categories, according to a Cars.com segmentation survey deployed in the fall of last year.
The survey found that a sizable 80 percent of all CPO shoppers compare CPOs to new cars and used cars during their research.
A total 40 percent of CPO shoppers compare CPO models against used cars, in contrast to just 29 percent of CPO shoppers who compare CPOs against new cars and other CPO vehicles.
Meanwhile, among the same CPO shoppers, 20 percent compare CPOs against other CPOs, and 12 percent compare CPOs against new cars.
When conveying to a shopper the benefits of a CPO purchase, Solheim added that dealers can avoid marginalizing non-CPO used vehicles by promoting the reputation of a given manufacturer’s CPO program, in conjunction with defending the dealerships’ used inventory.
“The dealer needs to be communicating the fact that the manufacturer has re-applied their name and backing to the vehicle. The vehicle has undergone a very thorough inspection, and they feel confident that the vehicle is basically as good as new," he said. “A used vehicle may have something like halfway worn tires — now that doesn’t mean it’s not a great used car, but it may very well mean it’s not qualified for certification.”