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Certified Pre-Owned Cars - US - July 2017

"CPO (certified pre-owned) vehicles are used vehicles that have been certified by an auto manufacturer or dealership to meet specific quality criteria. Certification gives car shoppers assurances as to the quality of the used vehicle that was purchased and the vehicles typically come at a higher price point than a standard used car. Market factors signal an increase in CPO inventory in the near future, so brands and dealerships will need to increase marketing to off-load the additional inventory."
- Buddy Lo, Automotive Analyst

This Report discusses the following key topics:

  • Less than two in 10 car shoppers considering a CPO vehicle for their next purchase
  • Awareness of certified pre-owned programs limit interest
  • Women show higher CPO consideration despite lower awareness

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • The issues
            • Overall purchase intent trending downward
              • Figure 1: Purchase intent, July 2016-April 2017
            • Less than two in 10 car shoppers considering a CPO vehicle for their next purchase
              • Figure 2: Purchase type, April 2017
            • Awareness of certified pre-owned programs limit interest
              • Figure 3: CPO awareness, by car shoppers, April 2017
            • The opportunities
              • CPO shoppers expect to pay $8,000 more than used car shoppers
                • Figure 4: Purchase type, by purchase price, April 2017
              • Pricing and low mileage can attract non-CPO shoppers
                • Figure 5: CPO influencers – Not considering CPO, April 2017
              • Younger women can be converted to CPO inventory
                • Figure 6: CPO awareness and consideration, by gender and age, April 2017
              • What it means
              • The Market – What You Need to Know

                • Certified pre-owned expected to grow
                  • Off-lease vehicles provide prime CPO inventory
                    • New vehicle incentives erode CPO demand
                    • Market Size and Forecast

                      • CPO sales growth expected to continue
                        • Figure 7: Total US unit sales and fan chart forecast of certified pre-owned vehicles, forecast, 2012-22
                        • Figure 8: Total US unit sales and forecast of certified pre-owned vehicles, 2012-22
                    • Market Breakdown

                      • Leasing grows as percentage of market share
                        • Figure 9: Method of acquisition, by most recently acquired vehicle, 2013-17
                      • Foreign brands grow share in CPO sales
                        • Figure 10: Most recently acquired CPO vehicle, by domestic and foreign, 2013-17
                    • Market Perspective

                      • New vehicle incentives reduce appetite for CPO
                      • Market Factors

                        • Off-lease vehicles increase supply of prime CPO-qualified inventory
                          • Figure 11: Method of acquisition, by most recently acquired vehicle, 2013-17
                        • High consumer confidence should boost sales
                          • Figure 12: Consumer Sentiment Index, January 2007-April 2017
                      • Key Players – What You Need to Know

                        • Top four brands top CPO sales as well
                          • Growth for Nissan will spur CPO sales
                            • Dealerships leasing CPO inventory
                              • Certified pre-owned programs lack exposure to overall market
                              • Brand Sales of CPO Vehicles

                                • Ford, Chevrolet, Toyota, and Honda make up nearly half of all CPO sales
                                  • Figure 13: Brand of most recent vehicle purchase, by CPO buyers, 2017
                              • What’s Working?

                                • Certified pre-owned market on cruise control
                                  • CPO sales similar to new vehicle sales
                                  • What’s Struggling?

                                    • Overall awareness of CPO programs is lacking
                                    • What’s Next?

                                      • Leasing CPO vehicles
                                        • Figure 14: Infiniti CPO leasing acquisition email, email, August 2016
                                        • Figure 15: Certified Pre-Owned by Mercedes-Benz Sales Event, direct mail, February 2015
                                    • The Consumer – What You Need to Know

                                      • Shoppers considering CPO expect to spend $8,000 more than used shoppers
                                        • Awareness of CPO programs an issue
                                          • Price and low mileage top enticements for non-CPO shoppers
                                          • Purchase Intent

                                            • Nearly six in 10 consumers plan to buy a vehicle within the next three years
                                              • Figure 16: Purchase intent, April 2017
                                            • Purchase intent trending downward
                                              • Figure 17: Purchase intent, July 2016-April 2017
                                          • Purchase Type

                                            • CPO consideration low
                                              • Figure 18: Purchase type, April 2017
                                            • Younger women likely to consider CPO despite lower awareness
                                              • Figure 19: Purchase type, by gender and age, April 2017
                                          • Expected Price

                                            • Nearly six in 10 car shoppers plan to pay more than $25,000 on next vehicle
                                              • Figure 20: Expected price, April 2017
                                              • Figure 21: Expected price – Mean and median, April 2017
                                            • CPO shoppers expect to pay $8,000 more than used car shoppers
                                              • Figure 22: Purchase type, by purchase price – Mean and median, April 2017
                                          • CPO Awareness

                                            • Awareness and education an issue for CPO programs
                                              • Figure 23: CPO awareness, April 2017
                                              • Figure 24: BMW Certified Pre-Owned “Wash,” January 2017
                                              • Figure 25: BMW Certified Pre-Owned “Shopping Cart,” January 2017
                                            • Younger women least likely to know much about CPO programs
                                              • Figure 26: CPO awareness, by gender and age, April 2017
                                          • CPO Influencers

                                            • Price and low mileage attractive for nonshoppers
                                              • Figure 27: CPO influencers – Not considering CPO, April 2017
                                            • TURF analysis for shoppers not considering CPO
                                              • Figure 28: TURF analysis – CPO influencers, April 2017
                                            • Blacks receptive to dealership perks
                                              • Figure 29: CPO influencers – Not considering CPO, by ethnicity and Hispanic origin, April 2017
                                            • Price and clean history report are top reasons for CPO shoppers
                                              • Figure 30: Mercedes-Benz Certified Pre-Owned Sales Event, direct mail, May 2017
                                              • Figure 31: CPO influencers – Reasons for choosing CPO, April 2017
                                              • Figure 32: TURF analysis – Reasons for choosing CPO, April 2017
                                          • Brands Considered for CPO

                                            • Top-selling brands get top responses for consideration
                                              • Figure 33: Brands considered for CPO, April 2017
                                            • Toyota and Honda outperform among CPO shoppers
                                              • Figure 34: Brands considered for CPO, by purchase type, April 2017
                                          • Attitudes toward Certified Pre-Owned

                                            • Majority of shoppers associate used purchases with risk
                                              • Figure 35: Attitudes toward CPO, April 2017
                                            • CPO inventory can expand luxury brand reach
                                              • Figure 36: Attitudes toward certified pre-owned, by purchase type, April 2017
                                            • Younger shoppers receptive to extended warranties
                                              • Figure 37: Attitudes toward CPO, by gender and age, April 2017
                                          • Cluster Analysis

                                              • Figure 38: Certified pre-owned segments, April 2017
                                            • New Car Buyers
                                              • Characteristics
                                                • Opportunities
                                                  • Figure 39: Profile of New Car Buyers, April 2017
                                                • CPO Skeptics
                                                  • Characteristics
                                                    • Opportunities
                                                      • Figure 40: Profile of CPO Skeptics, April 2017
                                                    • Bargain Seekers
                                                      • Characteristics
                                                        • Opportunities
                                                          • Figure 41: Profile of Bargain Seekers, April 2017
                                                        • Ideal CPO Shoppers
                                                          • Characteristics
                                                            • Opportunities
                                                              • Figure 42: Profile of Ideal CPO Shoppers, April 2017
                                                          • Appendix – Data Sources and Abbreviations

                                                            • Data sources
                                                              • Sales data
                                                                • Fan chart forecast
                                                                  • Consumer survey data
                                                                    • Direct marketing creative
                                                                      • Abbreviations and terms
                                                                        • Abbreviations
                                                                          • Terms
                                                                            • Methodology – TURF analysis
                                                                            • Appendix – The Market

                                                                                • Figure 43: Market share of certified pre-owned vehicles purchased, by most recently acquired vehicle, 2015-17
                                                                                • Figure 44: Market share of certified pre-owned vehicles, by most recently acquired vehicle, 2013-14

                                                                            Companies Covered

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                                                                            Certified Pre-Owned Cars - US - July 2017

                                                                            US $3,995.00 (Excl.Tax)