From the experts at Cars.com
To help dealers and manufacturers understand more about shopper motivations for purchasing or considering a CPO vehicle, Cars.com conducted a survey of nearly 900 online car shoppers in June 2012 who intended to purchase or had recently purchased a CPO vehicle.
With their manufacturer-backed warranty and quality assurance, certified pre-owned vehicles are gaining interest among car shoppers. For manufacturers, CPO programs can attract shoppers to the brand who aren’t yet ready to purchase a new vehicle, building loyalty to grow new-car sales in the years ahead. Dealerships who certify used vehicles can achieve a price premium on those vehicles and often create revenue opportunities in the sales and service departments beyond those typical of used car sales.
The Cars.com study brought forth the following information on CPO shopping behavior:
- The study found that quality, reliability and value are among the top reasons shoppers consider purchasing certified pre-owned, with many considering recent-model CPO vehicles as alternatives buying new. The findings also revealed that consumers place a premium on CPO vehicles over used cars and are often in market for a longer period of time than their used- and new-car shopper counterparts.
- Notably, one in four non-luxury CPO shoppers and one in three luxury CPO shoppers had owned a certified pre-owned vehicle in the past, indicating a somewhat high degree of customer loyalty – a significant benefit for dealers given the revenue opportunities made possible by certified pre-owned vehicle programs for business units beyond sales, including service and F&I. The following is a summary of the survey’s findings.
Most CPO Shoppers College Grads, Married
A total of 51% of CPO shoppers have a college degree or have completed post-graduate education, with 43% of the total reporting household income of more than $65,000. A higher proportion of luxury CPO shoppers reported earning more than $65,000 in their household and having post-secondary degrees, while a higher proportion of non-luxury CPO shoppers are female and non-white.
Quality, Reliability and Value are Key Drivers
Luxury CPO shoppers in particular are influenced by the ability to afford a luxury vehicle and get more features/options for their money, while non-luxury CPO shoppers are interested in the peace of mind and lower mileage compared with non-certified used, but at a lower price point than a new vehicle. In the case of both luxury and non-luxury shoppers, the survey respondents indicated they would pay a premium for CPO over non-certified used vehicles.
Most shoppers indicated an interest in purchasing a CPO vehicle that is less than three years old, with less than 1 in 4 considering a CPO vehicle five years or older. Nearly all luxury CPO shoppers also consider new vehicles, with 8 in 10 non-luxury CPO shoppers also considering new, while 7 in 10 of all CPO shoppers also consider purchasing a non-certified used vehicle.
CPO Shoppers In-Market Longer, Cross-Shopping More
The majority of consumers considering CPO vehicles spend more than four months shopping for a car, particularly in the case of luxury CPO shoppers – nearly 70 percent of luxury CPO shoppers spend at least four months in market.