AutoTrader study: CPO vehicles gaining shoppers’ interest, trust

Auto TraderCertified pre-owned vehicles – used cars, trucks and SUVs that have passed through rigorous inspections – are attracting more buyers than ever, and those buyers are more likely to remain loyal to the same brand when they make their next purchases.

Those are two findings of AutoTrader.com’s fourth annual CPO study which seeks to provide insights into consumer awareness and consideration of CPO to the automotive industry.

The findings are especially important now because of a wave of CPO-eligible vehicles AutoTrader and other industry experts expect to hit the market going into 2015.

“Over the next few years, more than nine million certifiable vehicles will be hitting the market, making now the time for consumers, manufacturers and dealers to pay close attention to the CPO landscape,” said Rick Wainschel, vice president of customer insights at AutoTrader.com.

“The insights from this study clearly show that consumers are more open than ever to CPO vehicles, and, if dealers and manufacturers can turn shoppers into owners, they are well-positioned to build long-lasting relationships with those consumers.”

Among the key findings of the study:

Familiarity with and consideration of CPO are rising, comprising three-quarters of new-car shoppers and 45 percent of used-car shoppers. Last year, 44 percent of new-car shoppers and 30 percent of used-car shoppers considered purchasing a CPO vehicle for the first time. Those figures are up from 22 percent and 18 percent, respectively in 2013, at least partly due to the economy the study concluded.

Educating prospective buyers that recent or newer model CPO vehicles have passed a detailed inspection provided by the manufacturer and typically come with a warranty boosted consideration by new-car buyers to 84 percent from 59 percent, and used-car buyers to 69 percent from 50 percent.

“Most shoppers still believe that vehicle certification comes from the dealership,” AutoTrader reported. “However, their consideration increases when exposing them to a comprehensive definition of CPO.”

Most shoppers are willing to pay a premium for CPO vehicles over non-certified counterparts. Among new-car shoppers, 84 percent are willing to pay more, which is up 22 percentage points since 2013, while 83 percent of CPO shoppers were willing to pay more, up from 66 percent the previous year, and 51 percent of used-car shoppers are willing to pay a premium compared to 34 percent.

“However, the amount of premium has decreased since 2013, with the biggest decrease seen among new-car shoppers,” according to AutoTrader. “In 2014, new-car shoppers said they were willing to pay a premium of $2,032, down significantly from $2,940 in 2013.”

CPO can be the gateway to new-vehicle sales, with 49 percent of satisfied owners overall likely to buy a new vehicle from the same brand, including 56 percent of men.

Look here for more details on the study, which included 450 interviews, split evenly among new, used and CPO shoppers planning to purchase a vehicle in the following six months. AutoTrader also surveyed 1,195 current CPO owners to understand their experience better.

AutoTrader is an online marketplace for new, used and CPO vehicles from dealers and private sellers.

 

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