Editor’s Notebook: CPO Continuing Growth Outside OEM Programs, Lithia Motors Ramping Up Used Sales

By Jon LeSage, Edi­tor, Used Car Mar­ket Reports

Here’s a few sig­nif­i­cant remar­ket­ing news devel­op­ments dur­ing the past week:

  • Cer­ti­fied pre-owned vehi­cle pro­grams are con­tin­u­ing to grow out­side man­u­fac­tur­er pro­grams. Auc­tion Direct USA, one of the largest inde­pen­dent used-car retail­ers in the US, part­nered with the Nation­al Inde­pen­dent Auto­mo­bile Deal­ers Asso­ci­a­tion and will be offer­ing NIADA Cer­ti­fied Pre-Owned vehi­cles at its stores. Vehi­cles in the pro­gram will under­go a 125-point inspec­tion and will have a “wor­ry-free” six-month/6,000-mile lim­it­ed war­ran­ty; a CARFAX Vehi­cle His­to­ry Report; flex­i­ble, ful­ly cus­tomiz­able war­ran­ty options; free vehi­cle main­te­nance; and the option of receiv­ing an exclu­sive 100-day/1,000-mile return option from Auc­tion Direct USA.
  • Lithia CEO wants to ramp up used sales. Lithia Motors pres­i­dent and chief exec­u­tive offi­cer Bryan DeBoer has an objec­tive that each of the group’s 130 deal­er­ships in 14 states turn at least 75 used vehi­cles each month – even though Lithia stores aver­aged 57 retail vehi­cle sales dur­ing the first quar­ter of this year. That will come from an abun­dant sup­ply of three-to-five year old vehi­cles avail­able as inven­to­ry, which he calls the group’s “core prod­uct.” Trade-ins are also fill­ing Lithia lots with more than 80,000 miles and often sold to con­sumers with sub-prime cred­it rat­ings.
  • Man­heim con­tin­ues to go mobile. Man­heim has added to new state-of-the-art trucks to its mobile auc­tion net­work. Eight addi­tion­al mobile units will be added lat­er this year, bring­ing up the total to 24. The new mobile unit will be packed with porta­bil­i­ty fea­tures, mak­ing it an “auc­tion in the box” where an auc­tion can take place any­where there’s demand. They’ll have the same Simul­cast capa­bil­i­ties of Manheim’s phys­i­cal auc­tions, and the same sup­port ser­vices deal­ers have come to expect at all its auc­tions.
  • Tes­la qui­et­ly launch­es cer­ti­fied pre-owned pro­gram. Last year, Tes­la Motors talked about launch­ing its own CPO pro­gram as its Mod­el S start­ed com­ing off-lease. That was launched last week with­out noti­fy­ing the media or cus­tomers, per­haps in a test mod­el.  Every pre-owned Mod­el S comes with a 4 year, 50,000 mile lim­it­ed war­ran­ty, accord­ing to the Tes­la web­site. On the site, a 2013 Mod­el S 85 is sell­ing for $65,550 and has 13,036 miles on its odome­ter.
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