In the past year, certified pre-owned (CPO) vehicle prices have surged due to high demand from consumers and a limited supply of new vehicles. As a result, more dealers are expanding their CPO programs.
When implemented correctly, CPO programs provide consumers with a high level of transparency and confidence. As a result, consumers are willing to pay more and the vehicles turn faster. However, when a CPO program is implemented incorrectly, it can become another marketing gimmick that destroys customer trust.
Dealerships with successful CPO programs share several best practices that other dealers can learn and benefit from.
Don’t Certify Every Vehicle
Remember the adage, “If everything is important, then nothing is important”? The same is true for CPO vehicles. Some dealers may be tempted to certify every used vehicle, but when every vehicle becomes special, none of them is special.
Separate your CPO vehicles from other inventory and explain to the consumer why this car is special compared to that car. Show them the inspection checklist and the amount of recon that was done on the car. When you provide the consumer with specific reasons and evidence why a vehicle was chosen to be certified, it helps to justify the higher price.
The best advice is to certify vehicles that you know best and that fit your inventory model. Make sure your team understands why every CPO vehicle was chosen to be certified, versus other vehicles that were not chosen.
Elevate Merchandising and Marketing
Are you marketing your CPO vehicles differently than your regular pre-owned vehicles? On your Vehicle Detail Pages and third-party listing sites, make sure you dedicate at least two photos on your picture carousel to slides that promote your CPO program. Post a photo of the actual inspection list signed by the technician. Include a slide that details all the benefits of your CPO program in a bulleted list.
The very first words in your vehicle description should mention this is a CPO vehicle. When you upload listings to third-party sites be sure to click on the certified box, otherwise the listings won’t show up in certified vehicle search results. Promote your CPO vehicles, along with CPO program benefits, in email marketing and on social media.
When merchandising your vehicles, park your CPO vehicles closest to the road where people can see them as they drive by. Display point-of-sale materials in your showroom and service department that promote the benefits of your CPO program.
Create a Seamless Experience
When a customer sees a CPO vehicle they like online and decides to visit your dealership, make sure that person has a seamless online to offline experience. What they saw online they should also see on the vehicle. Paste the CPO inspection list next to the vehicle label on the window. Include another sticker that explains the value proposition and benefits of CPO vehicles, including limited-warranty information.
One innovative dealer I know likes to buy two vehicles of the same model, with roughly the same miles and the same year. He then chooses to certify one but not the other. Consumers inevitably ask why one is priced $1,000 higher than the other vehicle. This opens the door to explain all the benefits of buying CPO. Almost always, the CPO vehicle sells first.
Don’t Be Afraid to Upsell
Every CPO vehicle comes with a limited warranty, but right now we are seeing high attachment rates to additional protection plans such as vehicle service contracts and GAP. Consumers have become conditioned to purchasing protection plans for products such as cell phones and computers, and vehicles are no different. Don’t be afraid to upsell by explaining how additional coverage can protect against the rising costs of service labor and parts.
CPO programs are a great way to boost your dealership’s reputation and to build customer loyalty and trust. These tips will help your dealership provide consumers with quality vehicles and the level of transparency they demand.
Jeremy Beck (pictured, left) is vice-president sales operations at APCO Holdings, a provider and administrator of F&I products for the auto industry.