It was a solid start to 2017 for the certified pre-owned vehicle market.
There were 192,586 CPO sales in January, which beats year-ago figures by 0.8 percent, according to Autodata Corp.
Last year was the sixth straight record year for certified pre-owned sales, with dealers moving 2.64 million CPO vehicles for a 3.5-percent increase, Autodata said.
Domestics sold 899,365 certified units in 2016 (down 3 percent), while Asian brands moved 1.3 million units for a 10-percent hike, according to Autodata. European brands were relatively static (down 0.3 percent) with 441,189 certified sales.
In the first month of 2017, Asian brands led the way, selling 98,208 units for a 9.4-percent hike.
Europeans were up 7.1 percent with 34,255 CPO units sold. Domestics sold 60,122 units, down 13.2 percent from January 2016.
In its 2017 Used Car Market Report, Manheim predicts that 2017 will be the seventh straight year of record CPO sales. Interestingly enough, off-lease volume gains create “both the need and ability for further growth,” the report states.
“There is also the desire to grow CPO sales, since they enable dealers to protect gross margins, improve turn rates, or boost F&I and service income. And, when CPO programs are properly structured and effectively marketed by manufacturers and dealers, the programs can provide all three of those benefits simultaneously,” the report said.
You’re still likely to see growth in certified, but some of the “low-hanging fruit” that boosted the allure of CPO — i.e. more dealer participation — has been picked, says Anil Goyal of Black Book. So the opportunity may come in other forms.
“I think there will be more opportunities for CPO product from the manufacturers to make it more attractive,” Goyal said in an interview at the NADA Convention & Expo. “There are some who are already doing unlimited mileage warranties on CPO … I think more has to be done around the CPO product, both in terms of the marketing of it and making that product better for it to continue to grow.”
More thoughts from Goyal and Manheim on the potential for CPO in 2017 can be found here.