Changes that Volvo Cars of North America made this year to its certified used-vehicle program have yet to pay off. But things are moving in the right direction, says Steve Golow, Volvo pre-owned car-line manager.
On Jan. 1, the warranty for certified-used Volvos was extended to 7 years/100,000 miles, whichever comes first, starting from the time the vehicle was sold as new. That is up from 6 years/100,000 miles.
That followed Volvo's new captive finance company taking over leasing in December. When it is time for those off-lease vehicles -- highly sought after by dealers for certification -- to be remarketed, they will be offered for sale exclusively to Volvo dealers first.
That's expected to be a big bonus for Volvo dealers' certified sales. Starting in 2009, U.S. Bank was the company's preferred finance provider and was in charge of remarketing vehicles it leased. U.S. Bank sold those off-lease Volvos in auction sales open to all dealers, with no preference for the brand's franchised dealers.
Offering an enhanced warranty and having control over the off-lease portfolio will help Volvo dealers sell more certified-used Volvos, Golow says. He expects the first group of off-lease vehicles remarketed by its captive to be available in December 2014.
Volvo has one of the lowest-volume certified used-vehicle programs in the industry. Golow predicts Volvo certified sales will rise at least 2 percent to 12,000 units this year, after falling about 9 percent in 2012. "Our sales are up slightly, about a percent over last year. We're not happy with that, but at least we're moving forward," he says.
As of Jan. 1, Volvo also set one flat fee for certification -- $1,300 -- for all vehicles, up from $950 to $1,195 depending on the price of the vehicle.
Though the per-vehicle certification fee has increased, it's still a bargain considering that the warranty has been extended for a year, says Ben Stein, general manager of Keystone Volvo of Berwyn and Keystone Volvo of Doylestown, both in Pennsylvania.
"It's a good tradeoff to get another year," he says, "because that year is what separates us from everybody else."