Consumers are willing to spend an average of $400 more for a certified used vehicle than a noncertified one. But more than half of consumers do not know that used-vehicle certification programs exist.
That is according to the J.D. Power and Associates 1999 Used-Vehicle Market Assessment study released last week. The study is based on the responses of 48,000 used-vehicle buyers who purchased 1994-99 model used cars and trucks.
Sara Wong Hilton, manager of market analysis at Power, said the proliferation of two- and three-year off-lease vehicles has prompted auto companies and financial institutions to find ways to make those vehicles more attractive to consumers. Many have turned to certification.
She said the companies also are concerned that used-vehicle sales do not cut into new-vehicle sales.
Used-vehicle certification programs vary by manufacturer. The programs usually include late-model used vehicles that undergo a safety inspection and are covered by extended limited warranties.
Of the consumers polled in the study, 21 percent said their used vehicles were certified and 53 percent were not aware of used-vehicle certification programs.
Hilton said the study did not address why so many consumers are unaware of used-vehicle certification programs. She said she believes it is because dealers do not aggressively market the programs.
'I would believe that it hasn't caught on at dealerships because of the (additional) cost to certify those vehicles,' Hilton said. 'A lot of our clients ask, `Is (certification) worth it?' We've found out that it is.'
She said the study shows that used-vehicle certification enhances customer satisfaction and loyalty.
For instance, 66 percent of the certified used-vehicle buyers in the study said they were happy with their vehicles and would purchase another certified used vehicle rather than a new one.
Consumers polled said they bought used rather then new vehicles because:
They could get virtually the same vehicle at a lower price
New vehicles depreciated too much
Product quality of used vehicles was the same as new vehicles
The survey shows that 34 percent of used vehicle buyers are between ages 35 and 49, Hilton said.
The survey was conducted May 14 through June 8.