Land Rover North America Inc. is beefing up its certified used-vehicle program so it can position the vehicles as a third model.
The upscale sport-utility company is about to see a huge increase in the number of Range Rovers and Discoveries coming off lease, said Jim Paugels, Land Rover used-vehicle manager. The company's captive finance company, Land Rover Financial Services, expects 3,300 leases to mature this year and 12,000 to mature in 2000.
Land Rover wants to keep residual values high, so it is working with its 119 U.S. dealers and encouraging them to buy the vehicles at auction. The company also is encouraging dealers to treat buyers of certified used vehicles the same way they treat new-vehicle buyers in terms of marketing, financing and the dealership experience.
On Nov. 3, Land Rover launched a new national newspaper advertising campaign in USA Today touting the vehicles.
Paugels said the company wants its dealerships to be consumers' main source for used Land Rover vehicles.
'We've found that (buyers of used Land Rovers) are more price-conscious, (than new-vehicle buyers), but they demand the same things as new-car buyers,' Paugels said.
To qualify for certification, Land Rover vehicles must be no more than seven model years old and have fewer than 75,000 miles. The sport-utilities undergo a 100-point inspection and are covered by a 12-month/12,000-mile warranty.
Paugels said the company expects its dealers to sell about 7,500 used vehicles in 1999; of those, 3,400 will be certified. Used-vehicle sales are expected almost to double to 14,000 in 2000; of that number, about 7,000 will be certified.
'Consumer research tells us that consumers want to purchase certified used vehicles from franchise dealers,' Paugels said.
The company has begun some customer initiatives to support certified used vehicles.
After Land Rover sales people explain the certification process to used-vehicle buyers, they give buyers a signed copy of the certified inspection checklist. 'It builds value and owner confidence,' Paugels said.
Also new is a dealer-only Internet auction. The once-a-week auction gives Land Rover dealers first crack at the off-lease vehicles available from the company's finance company.
The auction debuted Oct. 28 with about 40 vehicles.
Once the online auction is in full swing sometime next year, Paugels said he expects that at least 25 percent of Land Rover's off-lease vehicles will be sold online.
From their computer screens, dealers see a photo and a full description of a vehicle being auctioned.
'We don't have to transport the vehicles to auction and the dealers don't have to send people across the country to live auctions,' Paugels said. 'When the vehicles get to (online auction) they are as close to front-line ready as possible.'
In cooperation with Land Rover Financial Services, the company is offering special lease rates of 2.9 percent for 24 months, 4.9 percent for 36 months and 6.9 percent for 48 months.
Eugene Weisberg, center manager of Land Rover North Dade in Miami, said he likes the enhancements to Land Rover's program.
'It's a great program,' he said. 'It helps us maintain good gross profits and keep the value of used Land Rovers high.
'Customers can rest assured that they have a quality vehicle that the manufacturer and the dealer are willing to stand behind.'
Weisberg declined to say how many used vehicles his store sells.
In addition to the new national ad campaign, Land Rover has created new regional ads that its dealers can personalize for their own use.