General Motors new CPO Program

Steve Devereaux
We don't certify a lot of vehicles in order to keep our costs down, but I am curious as to how GM's new CPO program is going. Has anyone been certifying cars? How has it been working for you. The biggest added benefit to the consumer is the 2 year maintenance plan in my opinion.
Tim Nester
Steve, We Certify all valid vehicles. Yes, the cost factor does come into play but it opens the door to F & I. We have been doing very well in our used car numbers since this release. You have to have the sales floor drink the kool-aid to get the best out of it. Our back-end product penatration for pre-owned has incresed by approx. 10% using this as a lead in to ESC's and continued maintenace programs. It is a tool that you need to use. Tim
Steve Devereaux
I'm scared that the .09% financing promotion (or whatever the promotional rate actually is) would hurt our back end profits.
Tim Nester
I have not experienced the Finance options being discussed by our clients often. In the last 10 months I believe that we have had 4-5 deals at that promotional rate. The advertised programs are showing the short term rates and that ends up being easy to overcome. I personally feel that taking the flat for selling at the buy rate will open the clients budget for better product penetration. Our plan is to balance rate income with product income to protect against chargeback situations. Our F & I department realistically does 60% of our retail finance deals at the buyrate because of aggressive dflats being paid from most lenders (2,3 and 4% flats). Selecting to go that route can build client trust and sway their attention when reviewing other products.

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