A survey indicates certified pre-owned (CPO) vehicle buyers demographically resemble new-vehicle customers more than used-car shoppers.
Typical CPO customers are younger, better educated, maintain a higher household income and own homes.
“Recognizing this should allow (dealers) to treat them more like a new customer,” Experien Automotive General Manager Dave Nemtuda says.
Certified pre-owned vehicles generate greater profit for dealers than do traditional used models, according to latest statistics from Cars.com and Experian.
Certified cars on average bring $1,700 more in profit than traditional used cars, says Joe Oliveri, group project manager for Cars.com, an online auto-buying service. “CPO sell faster and bring in more revenue.”
Statistically, CPO deals close faster and more often, helping to prevent inventory aging, he says. CPO vehicles also foster brand loyalty.
CPO shoppers are more likely than traditional used-vehicle shoppers to know what they want and are 21% more likely to purchase the brand for which they send a lead.
“(Dealers) need to certify more cars to generate more leads and you need to advertise the cars as certified,” Oliveri says.
In the Cars.com survey, 9% of shoppers say they set out specifically to buy certified, while 61% of respondents, after learning of CPO, say they would consider buying such a vehicle. Yet only 47% of car shoppers surveyed say they’re familiar with certified programs.
“When CPO cars are available, they outperform new-car sales,” Nemtuda says. “What it takes is for a dealer to certify the cars up front and keep them in inventory.”