What are the benefits of a certified pre-owned program? Depends on who you ask. But to run a successful program, everyone needs to see the advantages.
Would your team agree on the value of your program? Would customers be able to list the perks of a certified car? Here’s what we’ve heard from the field and how you can make the benefits clear to everyone.
A consumer’s perspective
“A certified vehicle is a better vehicle. It’s the next best thing to buying a new car.”
The effort that goes into making sure your certified cars are the cream of the crop gives customers peace of mind, especially if they’re new to the pre-owned market. However, there’s a follow-up question you need to be prepared to answer.
“But is it really worth the extra cost?”
Answering this depends on your sales team’s ability to communicate the benefits of certification.
Customers know that certified cars have passed a rigid inspection that minimizes risk. But it’s not always obvious what else comes with the program. It pays to be very clear about added benefits you offer. Vehicle service contracts, roadside assistance, loaner vehicles, discounted services, and other ancillary products are more than worth the cost if your customers understand their value.
Many customers expect a certified vehicle to be problem-free and may not see the need for added benefits if the car is “nearly new.” But it’s still a used car, just with less uncertainty. It’s important to have conversations around the cost of typical repairs they could face to highlight the value of the coverage you offer in your program.
A used vehicle manager’s perspective
“A CPO program adds more cost to already expensive used vehicles. My salespeople just can’t justify the additional expense.”
Help them see things differently. According to Cox Automotive, CPO sales hit 1.46 million in the first half of this year, outpacing the same period in 2019 when the previous record was set. That’s an increase of 220,000 CPO vehicles. It’s not an opportunity to ignore.
But investing in the right program can reach beyond increased sales. Think of the time spent prospecting new customers versus growing loyalty. If your efforts feel lopsided, a CPO program could be the differentiator to drive repeat business. Here’s how:
- Three out of five CPO buyers return to a brand they know. Certified vehicles allow buyers to remain brand loyal even if the newest model is out of their price range or unavailable.
- CPO drives more service traffic. Owners are more than three times as likely to service their vehicles at a dealership.
- According to an Autotrader study, 69 percent of CPO owners are “likely” to buy their next vehicle at the same dealership
- Millennials represent 22% of consumers. They want the same technology that new cars offer but are often outpriced. A certified vehicle may offer the same bells and whistles with a lower price tag.
A sales perspective
“CPO vehicles give me a competitive advantage! A ‘nearly new vehicle’ that comes with warranties and roadside assistance is the obvious choice.”
Keep up the momentum. Sales teams can create significant profitability benefits to both sales gross and F&I gross profit by focusing on your certified program. If your customers feel that they have the chance to get new car coverage and benefits at a used-car price, it’s a deal that’s hard to pass up.
A sales team that performs a proper needs assessment can work with customers to find the perfect car, even if those customers didn’t come in considering a pre-owned vehicle. Customers showing hesitation around reliability and maintenance will be relieved to hear about the reconditioning steps and protection products that come with a certified vehicle.
Demand—and prices—for used vehicles have skyrocketed. Taking the time to develop, market, and sell your certified pre-owned program pays off. Earn the confidence of both buyers and your sales team by choosing a program that offers the best value for the customer.
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