Mercedes pushes CPO as off-lease cars surge in

With the number of its off-lease vehicles expected to spike in 2018, Mercedes-Benz USA is putting extra focus on selling used vehicles — especially certified pre-owned models — and backing that up with added incentives.

"There's an initiative on the part of Mercedes to support a greater increase in the pre-owned business and the certified pre-owned business in particular," said Greg Barnes, chairman of the Mercedes-Benz Dealer Board and a Mercedes dealer in South Florida. "It's appropriate given the off-lease vehicle increases we're seeing. It's good. It helps us."

Mercedes is projecting 15 to 20 percent more lease vehicles will be returned in 2018 than last year, said Barnes, president of Bill Ussery Motors Group in Coral Gables, Fla., which operates two Mercedes stores.

The added focus kicked off with a three-month, Olympics-themed incentive for dealerships that runs through March. Barnes said it offers dealerships three levels of per-vehicle payments — gold, silver and bronze — for hitting individualized sales targets for certified vehicles. Barnes declined to share bonus amounts, and Mercedes officials declined to talk about the promotions.

In addition to the dealership incentive, Mercedes ran a national promotion in January and February targeting vehicle buyers. It included TV commercials, and buyers were offered special financing deals and two free maintenance visits. That event ended Feb. 28, but Mercedes continues to offer special financing rates, and some regional dealer advertising groups are still running the CPO-focused commercials in their markets, Barnes said.

More promotions are expected this year.

"To incentivize dealerships and help move the needle on CPO sales, we're going to have three sales events instead of two" this year, Barnes said. "We're going to have more robust incentive programs."

Dealers are embracing the additional focus, Barnes said. Certified pre-owned sales at his dealerships increased by double-digit percentages during the first two months of 2018, and he credits that to the new promotions.

"You put a carrot out there," he said, "and everyone chases the carrot."