The year 2016 was the sixth consecutive year of record certified pre-owned (CPO) auto sales in the U.S., and 2017 may be another banner year for this segment of auto sales. Automotive industry analysts have predicted that 2017 will see another strong sales year for certified cars -- or CPO --, due to a high volume of off-lease vehicles returning to the marketplace. With recent years of strong new car sales in the U.S., the same data suggests that the high volume of two-year leases ending this year will provide ample supply of quality, late-model used cars that can be certified, either by the auto manufacturer or by private dealerships.
Study Finds Consumers Value Certified Pre-Owned CPO Cars, Some Still Unfamiliar with Programs & Benefits
The Cox Automotive CPO Study details the annual sales and trends of the certified used car market. The 2016 CPO Study from Cox Automotive found that last year, certified cars around the country sold on average five days faster (30 days vs. 35 days) than non-CPO used cars. The study also details consumer awareness and sentiment of CPO programs. By surveying car shoppers, it found that consumers are willing to pay $3,000 more for a certified car than for the same make, model and year vehicle without a CPO designation. A J.D. Power and Associates survey of 3,090 respondents found that nearly half of the general U.S. population is either "not at all" or "slightly familiar" with certified pre-owned programs. Together, these aspects of the studies suggest that, when aware of the benefits of a certified car, consumers place a great deal of value in purchasing a certifiedcar over a regular used car.
The "Sweet Spot" of the U.S. Car Market
It is clear that certified used car sales have been gaining steam, with six consecutive years of record sales for the car segment. In 2016, certified car sales increased year over year by 3.5 percent, to the tune of 2.6 million vehicles. Still, the CPO market represents roughly 21% of all used cars sales at franchise car dealerships. As the CPO market is far stronger at franchise dealerships such as your local Ford, Toyota, Honda or Mercedes-Benz dealer than at third-party used car dealerships, there is clearly plenty of room for growth in the segment. Potentially the largest factor of growth in CPO sales over the coming years will be in consumer awareness. As the overall used car market continues to show signs of strong sales, so too should the CPO market. Certified cars, SUVs and trucks represent the "sweet spot" between the new vehicle and used vehicle markets. With a certified car, consumers find the assurance of a rigorous inspection and a generous warranty program at a price that is significantly lower than the new car price. To find your next certified car, shop today at CertifiedCars.com.