In 2012, Auto Remarketing launched its “Best CPO Dealers in the USA” series, an annual program that includes brand-by-brand rankings of the dealerships with the most certified pre-owned sales from the preceding year.
The No. 1 CPO seller for Nissan has been the same in each of the seven editions of “Best CPO Dealers.”
That dealership? The appropriately named Trophy Nissan in Mesquite, Texas. The store, located in the Dallas area, has now added a new “trophy” to its mantle.
Trophy Nissan is Auto Remarketing’s 2018 CPO Dealer of the Year, an award sponsored by ADESA.
The CPO Dealer of the Year award will be presented at the Used Car Awards Luncheon, which is sponsored by TradeRev, on Nov. 13 during Used Car Week.
‘Go all in’
Nearly a decade ago, Trophy Nissan decided to “go all in” with certified pre-owned, said Eric Shoemaker, the store’s pre-owned director. The dealership began making sure its personnel was “comfortable with the certification process” and implementing a reconditioning strategy to where any qualifying car was reconditioned to the point it met Nissan’s CPO requirements.
Certified has been “our big value-add,” Shoemaker said, helping to differentiate the store from its peers.
Making CPO a focal point has clearly resonated with Trophy’s customer base. Shoemaker said in the phone interview that, “when we’re asking them why they chose us, it’s ‘because we wanted to buy a certified car.’”
The consumer “acceptance” of CPO continues to gain traction each year, Shoemaker said.
And that’s evident in Trophy’s sales. The dealership sold 2,125 CPO vehicles last year to top Nissan’s ranking, and Shoemaker expects to see an uptick in certified sales (and overall sales volume, for that matter) this year. And he believes Trophy will once again lead Nissan’s CPO list.
“I can’t foresee us losing that spot this year, either,” Shoemaker said.
CPO challenges & opportunity
Going back to Shoemaker’s point on consumer acceptance of certified, he attributes it to the peace-of-mind that CPO can offer.
“I think that everybody’s had a bad experience with a used car, and the certification, that peace-of-mind, knowing that you’re buying something that’s a good piece of equipment, is just more and more important,” he said.
“And people are willing to spend a little bit extra money to make sure that they’re getting something that’s had Nissan certified technicians going through it,” Shoemaker said. “That way they’re not going to have problems after the sale.”
That’s certainly an opportunity CPO offers.
One trend that presents both a challenge and opportunity in certified is the strong supply of off-lease volume.
“It can be a double-edged sword. It’s helped with availability… (however) it’s hurt values, where obviously, big supply always is going to drive down price, which drives down the value of a car,” Shoemaker said. “But as far as for a resale standpoint, people are getting more for their money.”
He did note in the August interview that “in the last few months” supply had gone down, so “we’re seeing a pretty big rebound in values for their product.”
One challenge specific to the Dallas area is that it’s “super competitive,” Shoemaker said.
“And it always has been. As far as wholesale goes, I would say this is probably one of the stronger markets in the country,” in terms of the prices that vehicles will fetch, he said.
“It’s hyper-competitive,” Shoemaker said. “There’s a lot of good Nissan stores in the area, and (they) do a good job. This makes it even more important to differentiate yourself from them.
“It’s everything. It’s your sales process and how you’re handling internet leads; it’s a collection of stuff. Making sure that you get the opportunity and take really, really good care of the customer. That’s kind of the name of the game.”
However, he did note that being in such a competitive market means CPO prices are relatively low, which has driven out-of-state business for Trophy.
Much of that business is set up over the phone, where the shopper discusses the deal with the necessary dealership personnel over the phone and then has an easy handoff once he or she comes into the store.
“More and more people are preferring to do it that way,” Shoemaker said.
As far as the overall used-car market (beyond his neck of the woods), he sees the biggest challenge as “staying competitive and running a decent margin at the same time.”
He counts one of pluses as the fact that there’s solid supply.
“The certified pre-owned business is really, really good. There’s a lot of demand,” Shoemaker said. “If you can acquire and turn it into a good quality product, there’s going to be somebody that’s looking for it.
“That’s a huge positive. There’s a big demand for pre-owned cars, especially certified.”