INTRODUCTION CPO sales see slower growth C

[Pages:12]GUIDE TO

CERTIFIED PRE-OWNED VEHICLE PROGRAMS

contents

Acura, Audi, Bentley, BMW, Cadillac

4

FCA US, Ford, General Motors, Honda,

Hyundai

5

In niti, Jaguar, Kia, Land Rover, Lexus

6

Lincoln, Maserati, Mazda, McLaren,

Mercedes-Benz

7

Mini, Mitsubishi, Nissan, Porsche,

Rolls-Royce

8

Smart, Subaru, Toyota, Volkswagen, Volvo

9

Certi ed pre-owned vehicle sales,

2016 by month

10

Data highlights, glossary of terms

11

INTRODUCTION

CPO sales see slower growth

Jesse Snyder

jsnyder@

C erti ed pre-owned vehicle sales rose through the rst three-quarters of 2017, although at the slowest rate in the past seven years. U.S. CPO sales rose 1 percent through nine months to 2 million vehicles vs. a 3.5 percent gain for all of 2016 and double-digit annual gains in 2013 and 2014. In 2012, the increase was 5.3 percent.

But that slower growth outperforms a 1.7 percent decline in U.S. new-vehicle sales over the same period this year.

Ironically, the surge of late-model used vehicles returning to the marketplace is making some dealers less willing to spend money to certify them, said Ivan Drury, senior analyst for Edmunds.

"When there's a ood of used vehicles on the market, for some brands, the consumer just doesn't see the value of a CPO vehicle," he said. "For price-conscious consumers, an extra $1,500 or $2,000 can make a deal look di erent."

Costs, pro ts

Whether a speci c late-model used vehicle becomes a certied pre-owned one depends on, rst, meeting that brand's CPO requirements, which typically spell out the maximum allowable age and mileage and eliminate vehicles that are damaged or have been in signi cant collisions. But dealers must decide whether to invest the cost of the rigorous multipoint inspections and repairs. at's a business decision for dealers who know local markets and which models would be more pro table carrying a CPO pricing premium and which would net more as ordinary used vehicles. And in regional markets with an abundant supply of similar used models, dealers often decide to certify fewer late-model used vehicles, Drury said. "Certifying a unit jacks up what dealers spend," he said. "A dealer can end up pricing this CPO car right out of its segment." In addition, heavy price promotions on new models can reduce the price premium a same-brand CPO vehicle can fetch, "especially if you have some leasing specials on the lot," Drury noted. Automakers are spending heavily on factory incentives to clear 2017 models o dealer lots this fall. ALG estimated industrywide new-vehicle incentives at 11.5 percent of average transaction prices in October.

ose big new-car incentives exert downward pricing pressure on the top end of the used-vehicle market, particularly CPO.

Meanwhile, some automakers are trying to help their dealers control certifying costs.

For example, in October, American Honda Motor Co. launched its Total Transparency program, which lets Honda and Acura dealers download a digital certi cation program to reduce the administrative time.

With surging numbers of o -lease vehicles returning to market, "it's crucial we provide dealers a technology that will make certi cation of these highly desirable vehicles faster, easier and more transparent for customers," said Dan Rodriquez, American Honda's manager of remarketing and CPO.

At the same time, consumers can go to a Honda or Acura website and download the 182-point inspection certi cation for speci c CPO vehicles to verify exactly what was inspected before they go to a dealership.

American Honda Marketing Vice President Vicki Poponi told Automotive News the automaker wants to connect with both dealers and CPO buyers. "Honda really wants to grow the trust level with everyone," she said.

Winners, losers

American Honda's CPO sales climbed 7.6 percent through the rst nine months.

Nissan North America was up 15 percent, and FCA US and Subaru of America both gained 14 percent. Volkswagen Group of America boosted CPO volume 3.7 percent.

But several other major players lost volume. Perennial CPO sales leader Toyota Motor Sales U.S.A. fell 10 percent to 351,827 vehicles.

Similarly, No. 2 General Motors and No. 4 Ford Motor Co. both fell around 4 percent. Hyundai-Kia lost 6 percent, and Mercedes-Benz USA dropped 4.9 percent.

During the 2009 nancial crisis, CPO sales fell 9.7 percent to 1.53 million but still outpaced new-vehicle volume, which tumbled 21 percent that year.

Since 2009, automakers have embraced CPO programs as a pro table channel to remarket vehicles coming o lease or out of eet use. And many dealers have expanded CPO operations.

Between 2009 and 2016, CPO sales volume soared 73 percent, or by more than 1.1 million vehicles, to 2.64 million. a

The Automotive News Data Center surveys automakers directly to gather the information in this supplement, except as noted. 3

Program name/Top executive/Web address

Acura

Acura Certi ed Pre-Owned Vehicles Daniel Rodriguez manager, automobile remarketing CertifiedPre-Owned.aspx

No. of dealers in program/ Total newvehicle dealers

Dealer fees per vehicle

269/

$520-

270

$3,035

Dealer criteria

Dealers sign voluntary participation agreement

Vehicle criteria

Independent third-party Warranty inspection details

Is there a

Is the

Dealer

warranty warranty return/

deductible?/ transferable?/ exchange

cost

fee

program

182-point inspection Yes 6 model years or newer Less than 80,000 miles

CPO powertrain: Extends the coverage to 84 months/100,000 No/$0

Yes/$0

miles from original in-service date

12-month/12,000-mile limited warranty following expiration

of new-vehicle limited warranty

Emergency roadside assistance, trip interruption expense reimbursement, rental

vehicle reimbursement, concierge service, complimentary 3-month SiriusXM

radio service

3-days exchange

only

Audi*

298/

Audi Certi ed Pre-Owned

298

Jim O'Brien

director, Audi business development

certified-pre-owned

*Reflects 2017 Audi Certified Pre-Owned program details

$1,350$1,950

Audi franchised 300+ point inspection Yes

dealer in good 5 model years or newer

standing

Less than 60,000 miles

In service for at least

4 months or 4,000 miles

Remainder of new-car limited warranty 24-month/50,000-mile comprehensive after new-car warranty expires (transferable between private parties); total vehicle miles not to exceed 100,000 miles Roadside assistance

Yes/$85

Yes/$150 Dealer option

Bentley

49/

Bentley Pre-Owned

49

Michael Rice

CPO manager

en/models/pre-owned

N.A. Bentley trained Pass demanding

No

Comprehensive and exclusive unlimited-mileage Bentley

No/$0

and certified technical inspection by

warranty valid for a minimum of 12 months with the

staff

Bentley-certified technicians

option to extend coverage further

Roadside recovery and home assistance to garaging and storage, travel

and accomodations cost (where applicable); car hire and car repatriation

Yes/$0

Varies by

dealer

BMW*

Certi ed Pre-Owned by BMW Shaun Bugbee executive vice president, operations cpo

*See website for program details

342/

$800- Dealers sign Comprehensive inspection Yes BMW CPO: 5-year/unlimited-mile comprehensive

No/$0 Yes/$300 Dealer

342

$4,500 a participation 5 model years or newer

after new-car warrantly expires

option

agreement; Less than 60,000 miles

BMW CPO: 6-year/unlimited-mile comprehensive

recondition with

after new-car warranty expires

only genuine

CPO: 5-year/unlimited-mile roadside assistance; 6-year/unlimited-

BMW parts

mile roadside assistance

Complimentary SiriusXM Radio 3-month subscription

Cadillac

Cadillac Certi ed Pre-Owned Vehicles Adam Ritter manager, sales remarketing

702/

$1,095- Dealers must be 172-point inspection No

6-year/100,000-mile limited warranty from original

Yes/$50 Yes/$0 3-day/

762

$1,295 enrolled, active 60 months from original

in-service date

150-mile

in program and in-service date/less

3 months of OnStar and SiriusXM Radio at no additional cost

exchange

meet minimum than 60,000 miles

Roadside assistance, courtesy transportation, fully

of

compliance standards

transferable

purchase

only

Note: Total new-vehicle dealers as of October 2017. Dealer fees may include per-vehicle certi cation fees, advertising fees and warranty fees.

N.A. = Not available

Source: Automotive News Data Center

4

Program name/Top executive/Web address

FCA US*

Certi ed Pre-Owned Vehicles Eric Swanson head of certified pre-owned vehicles certifiedpreowned.

*Reflects certified pre-owned vehicle program details for Chrysler, Dodge , Jeep and Ram brands.

No. of dealers in program/ Total newvehicle dealers

Dealer fees per vehicle

N.A./

$350

N.A.

Dealer criteria

Dealers must complete dealership installation program

Note: Information from certifiedpreowned.

Vehicle criteria

Independent third-party Warranty inspection details

Is there a

Is the

Dealer

warranty warranty return/

deductible?/ transferable?/ exchange

cost

fee

program

125-point inspection No

and reconditioning process

5 model years or newer Less than 75,000 miles Clean title history No frame damage

CPO powertrain: Extends the coverage to 84 months/100,000 Yes/$100

miles from original in-service date

3-month/3,000-mile Maximum Care warranty from sale date Upgraded warranty program available, including industry-exclusive

lifetime warranty upgrade

Complimentary SiriusXM Radio 3-month trial subscription Free CarFax vehicle history report and covered by CarFax Buyback Guarantee

Yes/$150

None

Ford

Ford Certi ed Pre-Owned Program Paul Russell manager, Ford sales operations & communications certified-used

2,500/ 3,100

$520$620

Meet training 172-point inspection Yes requirements; 6 model years or newer signed agreement; Less than 80,000 miles $1,000-$2,000 annual fee per dealer planning volume

Powertrain: 7-year/100,000-mile limited warrantly from

Yes/$100

original in-service date

12-month/12,000-mile comprehensive limited warranty from end

of new-car warranty or CPO purchase date, whichever comes first

7-year/100,000-mile 24-hour road assistance from original in-service date

Free CarFax vehicle history report and covered by CarFax Buyback Guarantee

Yes/$0

None

General Motors

Certi ed Pre-Owned Vehicles from Chevrolet, Buick and GMC

Tom Grekowicz

senior manager, pre-owned vehicles operations



2,800/ 3,100

$499 Dealers sign 172-point inspection No

participation and reconditioning process

agreement

6 model years or newer

Less than 75,000 miles

No open recalls

Powertrain: 6-year/100,000-mile limited warranty from original No/$0 in-service date

Bumper-to-Bumper: 12-month/12,000-mile limited warranty after new-car warranty expires

Two included maintenance visits within 2 years/24,000 miles of purchase 24/7 roadside assistance for duration of powertrain warranty SiriusXM Radio and OnStar 3-month basic trial

Yes/$0

3-day/ 150-mile exchange

of purchase

only

Honda

Honda Certi ed Pre-Owned Vehicles Daniel Rodriguez manager, automobile remarketing

1,038/ 1,048

$440$635

Dealers sign voluntary participation agreement

182-point inspection Yes 6 model years or newer Less than 80,000 miles

CPO limited warranty extends the powertrain coverage to 84 months/100,000 miles from original in-service date 12-month/12,000-mile limited warranty following expiration of new-vehicle limited warranty Free 3-month trial of SiriusXM Radio

No/$0

Yes/$0 None

Hyundai

Hyundai Certi ed Pre-Owned Jose Froehlich senior manager, certified pre-owned certified-pre-owned

779/

$399-

836

$499

Note: Total new-vehicle dealers as of October 2017. Dealer fees may include per-vehicle certi cation fees, advertising fees and warranty fees.

Dealers must 150-point inspection No

enroll in data (higher for Equus and

extraction and Sonata Hybrid)

abide by program 5 model years or newer

operating

Less than 60,000 miles

guidelines

Must pass CarFax

vehicle history report

Remainder of 5-year/60,000-mile new-car limited warranty from original in-service date and zero miles CPO powertrain limited warranty: 10 years/100,000 miles from original in-service date and zero miles 10-year/unlimited-mile roadside assistance, travel interruption and rental car reimbursement for covered repairs, free 3-month trial of SiriusXM Radio

Yes/$50

Yes/$0

None

N.A. = Not available

Source: Automotive News Data Center

5

Program name/Top executive/Web address

Infiniti

In niti Certi ed Pre-Owned Sam Liang senior manager, Infiniti CPO cpo.certified-pre-owned

No. of dealers in program/ Total newvehicle dealers

Dealer fees per vehicle

213/

$599-

N.A.

$1,489

Dealer criteria

Dealers sign agreement to comply with all CPO program guidelines

Vehicle criteria

Independent third-party Warranty inspection details

Is there a

Is the

Dealer

warranty warranty return/

deductible?/ transferable?/ exchange

cost

fee

program

167-point inspection Yes Within 6 years of original in-service date

Less than 70,000 miles Clean title history Clean vehicle history

Vehicles with less than 15,000 miles receive a 6-year/

No/$0

75,000-mile warranty from original in-service date

Vehicles with more than 15,000 miles and are less than 48 months from the

original in-service date are covered by a 6-year/unlimited-mileage warranty

from the vehicles original in-service date

Vehicles with more than 15,000 miles and are more than 48 months beyond

their original in-service date receive a 2-year/unlimited-mileage warranty

that begins from the CPO sale date

Yes/$50

None

Jaguar

165/

Jaguar Approved Certi ed Pre-Owned

165

David Wolfe

remarketing manager, JLR North America

certified-preowned/benefits

Varies by model

Available to all Jaguar dealers

165-point inspection Yes 5 model years or newer Less than 60,000 miles

Up to 7 years/100,000 miles from original in-service date Up to 24 months/50,000 miles comprehensive after new-car warranty expires 24-hour roadside assistance, trip interruption benefits, rental car reimbursement

No/$0

Yes/$0 None

Kia

Kia Certi ed Pre-Owned Program William Peffer vice president, sales kia-

733/

$450 Enrollment

150-point inspection No

Powertrain: 10-year/100,000-mile limited warranty from original Yes/$50 Yes/$40 See

775

and adherence 5 model years or newer

in-service date; plus 12-month/12,000-mile Platinum mechanical

dealers

to certification Less than 60,000 miles

coverage from CPO date of sale

for

policy and

Platinum mechanical coverage from CPO date of sale, roadside

details

procedures

assistance, rental car allowance, travel breakdown coverage

and 24/7 call center for customer assistance

Land Rover

168/

Land Rover Approved Certi ed Pre-Owned

168

David Wolfe

remarketing manager, JLR North America

cpo

Varies by model

Available to all Land Rover dealers

165-point inspection Yes 5 model years or newer Less than 60,000 miles

Up to 7 years/100,000 miles from original in-service date Up to 24 months/50,000 miles limited warranty after new-car warranty expires 24-hour roadside assistance, trip interruption benefits, rental car reimbursement

No/$0

Yes/$0 None

Lexus

L/Certi ed by Lexus Eric Schuttee operations manager, L/Certified lcertified

238/

$995- Dealer signs 161-point inspection Yes Unlimited-mileage vehicle warranty up to 6 years

No/$0

No/$0 None

238

$1,395 L/Certified

6 model years or newer

24-hour roadside assistance, trip interruption coverage,

enrollment

Less than 70,000 miles

loaner vehicle, factory-recommended maintenance for two

form

years or 20,000 miles, whichever comes first

Note: Total new-vehicle dealers as of October 2017. Dealer fees may include per-vehicle certi cation fees, advertising fees and warranty fees.

N.A. = Not available

Source: Automotive News Data Center

6

Program name/Top executive/Web address

Lincoln

Lincoln Certi ed Pre-Owned John Bradley general sales manager certified-used

No. of dealers in program/ Total newvehicle dealers

Dealer fees per vehicle

793/

$1,095

859

Dealer criteria

Vehicle criteria

Independent third-party Warranty inspection details

Compliance test 200-point inspection Yes

required;

6 model years or newer

$500-$1,500 Less than 60,000 miles

annual fee

based on dealer

planning volume

6-year/100,000-mile comprehensive limited warranty from original in-service date Complimentary roadside assistance 24 hours/7 days a week, rental car expense reimbursement, destination expense assistance Free CarFax vehicle history report and covered by CarFax Buyback Guarantee

Is there a

Is the

Dealer

warranty warranty return/

deductible?/ transferable?/ exchange

cost

fee

program

Yes/$100 Yes/$0 None

Maserati

Certi ed Pre-Owned by Maserati Kim Mathers head of remarketing

111/

$2,095- Dealers sign Less than 48 months No

24-month/unlimited-mile comprehensive

111

$2,445 a participation from original in-service date

Named Exclusion coverage after new-car

with $250 agreement

Less than 50,000 miles

48-month/50,000-mile warranty expires for a total of up to

inspection

Maintained in accordance

6-year/unlimited-mile coverage

credit

with factory guidelines,

Roadside assistance

comprehensive inspection

and reconditioning

No/$0

Yes/$0

Dealer option

Mazda

587/

Mazda Certi ed Pre-Owned Vehicle Program

593

Chris Rathbun

senior manager, certified pre-owned



$0 enrollment

$399 per vehicle certification

fee

Dealers sign a participation agreement

160-point inspection No 6 model years or newer Less than 80,000 miles

Powertrain: 7-year/100,000-mile limited warranty

No/$0

from original in-service date

12-month/12,000-mile additional limited warranty that begins

at the end of the new-car factory warranty or on CPO purchase date

24-hour roadside assistance for the duration of the warranty

3-year Buyback Protection offer with Autocheck

Yes/$0 None

McLaren

McLaren Quali ed Tony Joseph president, McLaren North America preowned.

22/

Zero or Meeting the Inspection

No

Minimum 12 months, up to 24 months,

22

purchase of customer

Up to 10 years old

renewable via Extended Warranty

the qualified promise and Less than 100,000 miles

All components except wear and tear or accoustic

warranty presentation

standards

(showroom and

online)

No/$0

Yes/$50 None

Mercedes-Benz

380/

Mercedes-Benz Certi ed Pre-Owned Program 380

Adam Chamberlain

vice president, sales

mercedes/cpo

$595$1,580 MBCPO base warranty

Note: Total new-vehicle dealers as of October 2017. Dealer fees may include per-vehicle certi cation fees, advertising fees and warranty fees.

Dealer must Rigerous inspection Yes

meet training process

and performance 6 model years or newer

criteria as

Less than 75,000 miles

outlined in the

Mercedes-Benz

CPO program

Remainder of new-car limited warranty, plus CPO limited warranty

No/$0

with no mileage maximum until 5 years from original in-service date

12-month or 24-month extended limited warranty available

also with no mileage maximum

24-hour roadside assistance

3-month trial of Mercedes-Benz mbrace connected car services

3-month trial of SiriusXM Radio

Yes/$0

7-day/ 500-mile exchange

Source: Automotive News Data Center

7

Program name/Top executive/Web address

No. of dealers in program/ Total newvehicle dealers

Mini*

127/

Mini Certi ed Pre-Owned

127

Thomas Salkowsky

head of Mini sales & operations

minicpo

*See Mini dealer for complete warranty transferable fee details

Dealer fees per vehicle

$715$2,000

Dealer criteria

Vehicle criteria

Independent third-party Warranty inspection details

Is there a

Is the

Dealer

warranty warranty return/

deductible?/ transferable?/ exchange

cost

fee

program

Dealers sign Comprehensive inspection Yes a participation 5 model years or newer agreement; Less than 60,000 miles recondition with only genuine Mini parts

Mini CPO: 5-year/unlimited-mile comprehensive

No/$0

after new-car warrantly expires

Mini CPO: 6-year/unlimited-mile comprehensive

after new-car warranty expires

CPO: 5-year/unlimited-mile roadside assistance; 6-year/unlimited-

mile roadside assistance

Complimentary SiriusXM Radio 3-month subscription

Yes/$300 Dealer option

Mitsubishi

345/

Mitsubishi Certi ed Pre-Owned Program

360

Doug Yordy

fleet sales manager

certified-pre-owned

$399 One-time enrollment fee of $595

123-point inspection No 5 model years or newer Less than 60,000 miles

10-year/100,000-mile powertrain warranty from original in-service date

No/$0

Yes/$40 None

Nissan

Nissan Certi ed Pre-Owned Martin Gleason senior manager, CPO & pre-owned cpo

905/ 1,086

$399 Dealers sign 167-point inspection Yes Powertrain: 7 years/100,000 miles from original

Yes/$50 Yes/$50 None

agreement to 6 model years or newer

in-service date

comply with Less than 80,000 miles

Roadside assistance: 7 years/100,000 miles from original

all CPO

Clean title history

in-service date

program

3-year CarFax Buyback Guarantee and free 3-month trial of SiriusXM Radio

guidelines

Optional Security+Plus Extended Protection Plan available

for 7 years/100,000 miles or 8 years/120,000 miles

Porsche

189/

Porsche Approved Certi ed Pre-Owned

190

Vehicle Program

Kevin Harvey

manager, pre-owned business

usa/approvedused/porscheapproved

$1,890$2,390

Compliance with CPO policy and procedures

111+ point inspection Yes 8 model years or newer Less than 100,000 miles

Up to 6 years/100,000 total miles from original in-service date No/$0 if the vehicle is still under the new-car limited warranty at the time of purchase Porsche Approved Certified Pre-owned Limited Warranty Coverage is 2 years/100,000 miles from expiration of the new-vehicle limited warranty For vehicles no longer under the new-car limited warranty at the time of delivery, coverage extends 2 years/50,000 miles from the mileage at used retail delivery but not to exceed 100,000 total miles

Yes/$0

None

Rolls-Royce

36/

Provenance - The Certi ed Pre-Owned Collection 36

N.A.

rolls-

N.A. N.A.

Uncompromising

No

pre-delivery inspection

In-service 6 months or

6,000 miles

Less than 10 years from

original start-of-service date

1 or 2 year warranties available

No/$0

Complimentary standard servicing using genuine Rolls-Royce parts

24-hour roadside assistance and all the benefits of a new-car

warranty, including maintenance

Warranty can be extended beyond original manufacturer warranty

Yes/$0 None

Note: Total new-vehicle dealers as of October 2017. Dealer fees may include per-vehicle certi cation fees, advertising fees and warranty fees.

N.A. = Not available

Source: Automotive News Data Center

8

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