Last year's record fell by Dec. 1; tally likely to top 2 million

Certified-used sales soar, and '14 looks even better

Last year's record fell by Dec. 1; tally likely to top 2 million

Setting a certified record
20091,529,284
20101,636,735
20111,742,890
20121,834,766
20131,941,186*
*Through Nov.
Source: Automotive News Data Center, Autodata Corp. and company sources
Related Topics

Sales of certified used vehicles are heading for a record 2 million-plus units this year, pumped up by more off-lease vehicles returning to the market and by manufacturers' program enhancements.

And sales will go even higher next year, predict industry watchers and certified used vehicle program managers at automakers.

The industry sold 1,941,186 certified used vehicles through November, 16 percent more than it sold in the year-earlier period and 6 percent more than the 1,834,766 it sold in all of 2012, the previous record year.

Rick Wainschel, vice president of consumer insights at AutoTrader.com, and part of a team that oversaw the company's 2013 Certified Pre-Owned Study, says sales of certified used vehicles easily will exceed 2 million by year end.

He predicts 2014 sales will be even higher because of an increase in off-lease vehicles -- the bread-and-butter of certified used vehicle programs -- plus better acceptance among consumers.

"It's going to be a good year," Wainschel told Automotive News.

Half will consider


Fifty-five percent of new-car shoppers are willing to consider buying a certified used vehicle, up from 43 percent a year ago, the AutoTrader.com study found. The figure jumps to 69 percent when those shoppers understand what "certified pre-owned" entails, the study found.

Among used-car shoppers, 60 percent said they would consider certified used vehicles, and the figure rose to 66 percent when the definition of certified used was explained.

"While it is good to see that consideration for CPO vehicles is strong, there is still a lot of confusion about what CPO actually means," Wainschel said in a statement. "The more shoppers know about CPO, the more willing they are to consider the vehicles."

Certified used vehicles generally are newer and have been driven fewer miles than the typical used vehicle. They also have undergone a thorough inspection and have been approved by the vehicle manufacturer or a third-party certifying body. CPO vehicles typically also have extended warranties.

Toyota leads


The leader in certified used vehicle sales is Toyota Division. Its sales rose 13 percent through November to 342,209. That's 8 percent more than its nearest competitor, General Motors' GM Certified, which includes the Buick, Chevrolet and GMC brands, as well as the discontinued Pontiac and Saturn brands.

Dave Depew, Toyota's manager of certified used sales, credits the company's healthy supply of off-lease vehicles and a growing industry in general for helping to lift sales.

"In a growing market, we have more brand recognition because we've been at it longer," Depew says. Toyota's certified program started in 1996.

Larry Pryg, national manager of GM certified used operations, predicts his company's 2013 sales will total 340,000 to 343,000 units, the highest since 2008.

Through November, GM Certified sales rose 25 percent to 316,754. In 2008, 422,114 units were sold as GM Certified vehicles. Cadillac has a separate certified used vehicle program.

In June, the company extended powertrain coverage on 2013 and subsequent model-year Buicks to 6 years/100,000 miles, from 5 years/100,000 miles.

"They're near-luxury so we needed to give them a better warranty," Pryg says. Also "with Buick, sometimes customers don't drive as much and they're more likely to time out on age versus miles."

Mazda moves up


Mazda increased sales of certified used vehicles though November by 42 percent, to 34,719, putting its sales percentage gain among the highest in the industry.

Roger Basa, manager of certified used vehicles and remarketing at Mazda, attributes the company's strong sales of certified used vehicles to more availability of off-lease vehicles, special finance rates and Web-based training for dealership employees.

He also cites program enhancements in September that expanded certification eligibility to Mazda used vehicles up to 6 model years old and up to 80,000 miles on their odometers, up from 5 model years old and 60,000 miles.

The program enhancement also extends the warranty on certified used vehicles that have a portion of their 36-month or 36,000-mile new-car warranty remaining, to 48 months or 48,000 miles. Certified vehicles whose new-car warranties have expired are covered by a 12-month or 12,000-mile warranty.

"We're going to close out the year at around 38,000 units," Basa predicts. In 2012, Mazda's CPO sales totaled 27,239.

Hyundai also is racking up double-digit percentage increases in sales of certified used vehicles this year. Its sales rose 10 percent through November, to 69,912.

Jose Froehlich, senior manager of Hyundai's certified program, says he expects Hyundai dealers' sales of certified used vehicles by year end to exceed its 2012 sales of 70,049 by at least 10 percent.

Citing an expected increase in the number of Hyundai off-lease vehicles in 2014, he projects that sales next year will to grow at pace similar to this year's. He also believes the industry has room to increase sales of certified used vehicles.

"When you look at new-to-used ratio, overall and not just Hyundai dealers, there is a lot of opportunity for franchise dealers to pick up additional used-car business," he says. "CPO is a natural place to do that."

Joseph Lichterman contributed to this report.

You can reach Arlena Sawyers at asawyers@crain.com.


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