Though used prices are falling, rates are still high in the lanes — especially when dealers are looking to secure quality vehicles for their certified pre-owned operations programs.

With used prices remaining above average, it is crucial that dealers balance their reconditioning costs with profit potential.

To get an idea how some of the most successful dealers in the U.S. are tackling this concern, Auto Remarketing reached out to Bob Colabianchi, general sales manager at Chapman BMW. Chapman BMW was also recently featured in Auto Remarketing’s “Best CPO Dealers in the USA.” The dealership came in as the No. 3 top selling certified dealer for BMW with 1,455 certified units sold in 2013.

Colabianchi covered what makes a vehicle certifiable, things to consider when trying to convey the value of a certified ride to customers, Chapman’s CPO reconditioning process and more:

AR: Walk me through your reconditioning process for a CPO vehicle.

Colabianchi: Our sales manager is involved with the entire process. The CPO sales manager does a walk-around with the technician during the inspection process.  Reconditioning starts with our certified sales manager completing the vehicle information portion of the CPO inspection, inputting the vehicle into BMW’s system and verifying the maintenance and history are compliant with BMW’s CPO guidelines. 

AR: What makes a vehicle worth certifying?

Colabianchi: The only factor for a vehicle to be in the CPO program is the ability to meet BMW’s guidelines. If we can certify a vehicle, we do. 

AR: On the other hand, name a few things that may move you to wholesale a vehicle rather than certify. What are the deal breakers?

Colabianchi: Any derogatory history is the deal breaker. We review Carfax history, service history and internal history. If we have negative internal history or body shop repairs not listed on a Carfax, we wholesale the vehicle.

AR: How much CPO reconditioning gets outsourced, and how much goes to your dealership’s service department?

Colabianchi: All reconditioning goes through the service department.  Any dent, glass or touch up is performed by long-term venders for a reduced rate and charged to the car through the service department. 

Editor's Note: To read the entire Q&A, see the March 15 print and digital editions of Auto Remarketing, which focuses on Fixed Ops: Top Trends & Best Practices.