Shopping for a new car can be like going on a first date. You’re excited about the prospects of what’s ahead but anxious to get more details and find out whether things will work out long-term. Unfortunately, both experiences can leave you stressed out, instead of enjoying the process.
In the case of car shopping, high prices often spike anxiety. While consumers love all the features that a new car offers, price has become an issue, now averaging around $35,000 or $40,000 for new vehicles. As budget-minded car shoppers look for more choices, certified pre-owned (CPO) vehicles are becoming an attractive option, evidenced by the record 2.7 million CPO vehicle sales in 2018, according to Cox Automotive economists.
Dealerships can also benefit from these programs. By meeting manufacturer guidelines and touting certifications, dealerships can provide compelling alternatives to car shoppers who are suffering from sticker shock and frustrated by the car-buying experience. If the value of CPO vehicles is properly conveyed, dealerships can capitalize on the opportunity and earn more profit per vehicle than a new car sale.
Touting Your Certifications
The emphasis on CPO programs is even more relevant with new generations of car shoppers entering the market. As more millennials begin to buy cars, dealerships need to adapt to their needs. Millennials would rather have a three or four-year-old luxury vehicle than a brand-new economy car. This means dealerships need to switch gears and meet the consumers needs.
While the term “used car” is not appealing, certified pre-owned vehicles can be separated from the crowd. They go through a rigorous inspection process from the manufacturer to be labeled as certified pre-owned. These vehicles then come with a manufacturer-backed warranty as well as a new car look and feel after reconditioning. The average person would think you just bought a new vehicle, but you’re in on the secret that it was a better price!
Dealerships need to make consumers feel comfortable by clearly stating and providing all the details of these warranties. Consumers don’t want to purchase a vehicle just outside of its warranty period and potentially be on the hook for a battery or water pipe replacement. CPO warranty programs give consumers peace of mind, backed up with a real, tangible and typically long-term coverage with lots of miles or years remaining.
Capitalizing on New Customers
If properly marketed and communicated to car shoppers, certified pre-owned programs are an excellent opportunity to get consumers onto your lot that wouldn’t normally be there. With the growing popularity of these programs, almost every type of vehicle is available.
CPO programs provide a great opportunity for dealers to help consumers overcome the challenges of rising new car prices and get into a vehicle they thought was out of their reach. After all, wouldn’t it be nice to help car shoppers get into the vehicle they had their hearts set on, along with a price that doesn’t let them down? That’s the kind of car-buying process that turns the “first-date” of the car-shopping process into a long-term commitment that leaves everyone happy.
Brian Moody is the executive editor for Autotader.