By: Shane Marcum, General Manager, Cross-Sell and Inventory Solutions
Are you looking to generate more ROI from your used vehicle inventory? Consider these five reasons why you should market your Certified Pre-Owned (CPO) program:
Luxury for Less
A CPO vehicle provides a cost-effective option for car shoppers entering the purchase cycle. According to an Edmunds.com study, 88% of car shoppers say they are willing to pay a premium for a certified vehicle – up to $2,000 for a non-luxury vehicle and $2,700 for a luxury vehicle. Even with these premiums, car shoppers can move up to a more luxurious vehicle without sacrificing additional features. They can also spend less than originally planning to for a comparably-equipped new vehicle.
Better Condition, Newer Model Year
CPO vehicles provide an additional level of assurance for car shoppers considering the purchase of a used car. Potential automotive buyers who understand the value of “certified” branding experience peace of mind. These shoppers know that the vehicle has been fully inspected and repaired to meet OEM requirements, and may even have a remaining warranty. They know they are getting a quality car that they can trust. The extra premium cost is worth it.
Less Time and Money Getting Front-Line Ready
Reconditioning costs are usually less for a certified vehicle than for a typical trade-in, partly because many CPO-eligible vehicles are off-lease vehicles. Since leases are dinged for excess mileage, wear and tear, lessees pay close attention to these factors. As a result, off-lease vehicles are typically cleaner and with fewer miles than a typical trade-in. You’ll spend less time and money getting them ready for sale.
Increasing CPO Penetration
In 2015, CPO vehicles accounted for 22% of total franchise used sales, up almost 55% since 2007. As more car shoppers become familiar with the value of certified vehicles and share their experiences in their social circles, demand will continue to grow. Coupled with the rising cost of new vehicles, certified vehicles will continue to be an attractive option.
CPO Vehicles Sell Faster
Whether it’s speed to market, consumer peace of mind or perceived value, or a combination, it’s a fact, CPO vehicles sell faster than similar used vehicles.
With less expense for reconditioning and the added “peace of mind” premium that a certified vehicle brings, you’ll generate more ROI per unit for a CPO vehicle. Maybe it’s time to give CPO a try.