CPO/Vehicle Exchange Programs

Steve Devereaux
Does anyone use any CPO programs? I heard of one thru Olympicare that allows the certification of a vehicle for $230 per car ($180 to reinsurance, $50 to Olympicare). When the vehicle is certified they get a 6/6,000 mile Warranty, a 2/100,000 mile Powertrain Warranty and a 30 day Exchange privilege. It seems like a good idea. It's cheaper than the $400 manufacturer certification. We have never done a CPO program like this, so any information on CPO programs you know about would be great. I'm also curious as to the 30 day exchange privilege. Has anyone used an exchange policy before? How did it work out? Thanks!!!!
Charles Gallaer
Which OEM(s) do you sell? My store used to be somewhat active in Lincoln/Mercury's CPO program. I found CPO to be similar to offering an incremental product to sell in your showroom. CPOs really complement your new and 'traditional' preowned sales. I am a firm believer in the OEM's CPO programs, but I'm not as big of a fan of 3rd party CPO programs. The old adage of "you get what you pay for" certainly applies when selecting a CPO vendor. Does the vendor nickel and dime your service department? Do they ship you the parts instead of buying them through your parts department? How do they pay for repairs, and will your customer get hassled when s/he experiences a mechanical breakdown and some other dealer is more convenient than you are? How long have they been around, and what are consumers saying about them online? What does your state's dealer's association know about them? I saw some pretty bad reviews of Olympicare when I googled them. If they treat their consumers as the reviews would suggest, I would certainly avoid dealing with them. The exchange privilege seems like a gimmick. I believe that who you choose to partner with regarding CPO is just as important as selecting an extended service contract vendor. The consumer will view you and the service contract company as one in the same. You'll take the blame when the consumer has an issue with the other company. When the consumer sues the extended service contract provider for an uncovered repair s/he normally sues the dealer too. Choosing the wrong provider can lead to liability for your dealership, unsatisfied consumers, and investigations by state and federal regulatory agencies. If you want to get into the CPO business, I'd recommend making a business plan assuming participation in your OEM's program. Most OEM's offer great support for their CPO programs, including APR incentives, better advances, training, etc.
Steve Devereaux
Hi Charles. Thanks for the thorough response! We are a Chevrolet dealership and GM did just come out with a new CPO program. It's $400 per car to certify it. Those are all good questions your asked that I should find out about Olympicare. The dealer I heard this from has been using this program since 2009. The thing I do like about it is that you can say it is "Certified" and adds value to the vehicle. You don't get the special financing rates from GM in this program, however interest rates are so low anyway and I would imagine it hurts the F&I reserve. Take a look at ThinkMidway.com . Their used vehicles are "Midway Certified."
Ryan Davis
I usually don't reply to blogs, however when my internet manager told me our certified program was mentioned I thought I would respond. Couple of things to think about. The certified program we run is not an advertised program, we tailor made it. All certified programs are reinsured whether you take the risk and collect the reward or your OEM does is up to you. If you do it right there a lot of reward for you and your cutomers. When you set up your own certified program you control it. You can choose the coverage, deductibles and costs (with some help of good actuaries). As far as any google reviews of Olympicare you will want to do your research. Olympicare is the name of the warranty. The consultanting and administration company's name is Ethos Group. They are a little harder to find. They are hands down the best finance consultanting company around. You won't find a booth at NADA or an ad in Automotive News. They only sign new business by word of mouth. They are endorsed by several state associations, including our state. As far as the thirty day exchange, no gimmicks. It is a choice we made to prove to our customers we will stand behind them and their purchase. We lose money on some and make money on others but our policy is sound. We even had it approved by the state dealer licensing board and the association. Whatever program a dealer chooses will work as long as they are committed. Judging by our finance numbers, CSI and retention numbers the program is working great.
Steve Devereaux
Hi Ryan, Did you just join this site so you could reply to the post? Hahha You are in my father's twenty group, which is how I found out about your CPO program. I have no experience setting up a program like this. I talked to our Zurich rep and he said that they do have a reinsurance program, but I am not sure of how it works. Do you have to sell a certain number of service contracts a month to use Olympicare's reinsurance? Do you have any idea if you can set this up through Olympicare and still use Zurich?
Ryan Davis
Hello Steve, Send my your email address to ryan@thinkmidway.com and I will get you the information you need. Thanks Ryan

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