LAS VEGAS -- Dealers could charge more for their certified used vehicles.
That’s the conclusion of a Cox Automotive study released today.
The study found that the average consumer is willing to pay $3,000 more for a CPO vehicle than for the same vehicle without a certification. But dealers estimate that consumers will pay only $1,260 more for a CPO vehicle. The implication is that dealers may be pricing their certified inventory as much as $1,740 per unit below what consumers would be willing to pay.
In addition, the Cox Automotive 2016 CPO Study found that that a CPO vehicle sells on average in 30 days, or five days faster than the average 35 days for a comparable non-certified vehicle.
While the upfront cost of certifications may currently hold back some dealers from developing CPO programs, the combined value of higher price tags and faster turns more than counteracts this cost, the study concludes.
“CPO vehicles are a smart investment for any dealership,” Scott Hernalsteen, senior director of research and market intelligence for Cox Automotive Media Group, said in a statement. “That said, CPO only accounts for 21 percent of used-vehicle sales at franchise dealerships,” he said, citing National Automobile Dealers Association and Autodata/Motor Intelligence data. “This study proves that CPO vehicles are especially valuable for today’s consumers, and should encourage dealers to take advantage of untapped CPO opportunities.”
Cox Automotive released the study during the combined National Remarketing Conference and National Auto Auction Association convention here.
