Certified Pre-owned Cars - US - August 2014
“While CPO vehicle sales have seen tremendous growth over the past few years, they still only constitute about 14% of used car sales at franchise auto dealers. Factory-CPO vehicles suffer from poor consumer awareness and aren’t very well differentiated from dealer CPO programs.”
– Colin Bird, Automotive Analyst
Some questions answered in this report include:
- How can dealers address the awareness issue of factory-certified pre-owned vehicles?
- How can the CPO programs at GM, Chrysler and Ford increase market share and brand desirability?
Franchise dealers, which include over 25 certified pre-owned programs, are estimated to sell 2.2 million certified pre-owned (CPO) vehicles by the end of 2014. Most mainstream, mass-marketbrands now have healthy CPO programs, with fast growing brands at Kia, Subaru, Mazda, Ford, Chevrolet and GMC, helping to buoy sales. This will mark the fifth consecutive year of growth in CPO sales and marks the longest such run since the CPO market declined sharply during the recession.
Over the five year forecast, CPO sales are expected to peak in 2016 at an all-time high. The CPO market is primarily driven by the supply of late-model used vehicles, particularly off-leased vehicles, and by consumer awareness of CPO vehicles.
This report will highlight who is buying certified pre-owned vehicles and why. In addition, this report will help the reader discover which are the most sought after brands in regards to CPO, as well as the most important features, and what consumers are willing to pay for these vehicles. Additional information covered includes consumer awareness of specifics behind CPO programs, and whether or not there is a high level of consumer awareness when it comes to the differences between factory-certified pre-owned programs, which are mainly emphasized throughout this report, and dealer-run certified pre-owned programs.
The purpose of this report is to identify the purchase behavior of people buying certified pre-owned cars - what types of vehicles they plan to purchase, which brands, and how much they expect to pay (monthly and in total), among other attributes. A certified pre-owned car is defined as any well-maintained, late-model, used vehicle which has been inspected and refurbished by its original manufacturer or dealer. Certified pre-owned vehicles typically include warranties, and other additional benefits typically available only on new cars, but this isn’t necessarily required. While this report covers some elements of dealer-certified programs, such as those offered by CarMax, the majority of the report focuses on factory-certified pre-owned programs offered by major auto manufacturers.
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