Table of Contents
Executive Summary
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- The market
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- Figure 1: Total US volume sales and forecast of certified pre-owned cars, 2009-19
- Market factors
- An increase in late-model used vehicle supply to aid CPO sales growth
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- Figure 2: Vehicles in operation in US, by vehicle age, 2013-18
- New car sales drive supply of CPO vehicles
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- Figure 3: Total US unit sales and forecast of new light vehicles vs. CPO vehicle sales, 2008-18
- Off-leases affect supply of CPO vehicles
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- Figure 4: New lease share of new vehicle financing, 2009-13
- Key players
- Toyota, GM, Honda control half the CPO market
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- Figure 5: Total US unit sales of certified pre-owned vehicles, 2013
- The consumer
- More than one in 10 expectant car buyers plan to purchase CPO
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- Figure 6: Car buyers who expect to purchase a New, Used, or CPO vehicle, May 2014
- CPO intenders will purchase a regular used car if they cannot find what they want
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- Figure 7: Alternatives to a CPO vehicle for CPO intenders, May 2014
- Toyota, Honda top considered automakers for CPO vehicles
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- Figure 8: Automakers or retailers considered for CPO purchase, May 2014
- Most important features for CPO intenders include bumper-to-bumper and powertrain warranties and vehicle history check
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- Figure 9: Most important features when selecting a CPO vehicle, May 2014
- What we think
Issues and Insights
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- How can dealers address the awareness issue of factory-certified pre-owned vehicles?
- The issues
- The implications
- How can the CPO programs at GM, Chrysler and Ford increase market share and brand desirability?
- The issues
- The implications
Trend Application
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- Trend: Prove It
- Trend: Prepare for the Worst
- Trend: Click and Connect
Market Size and Forecast
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- Key points
- Certified pre-owned car sales to peak at 2.5 million sales per annum in 2016
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- Figure 10: Total US volume sales and forecast of certified pre-owned cars, 2009-19
- CPO vehicles comprise 5% of all used car sales; 14% of all franchise used car sales
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- Figure 11: Total US volume sales and forecast of all pre-owned cars and certified pre-owned cars, 2009-19
- Figure 12: certified pre-owned cars sales as a share of all franchise dealer used car sales, 2009-19
- A note regarding CNW Research
Market Drivers
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- Key points
- An increase in late-model used vehicle supply to aid CPO sales growth
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- Figure 13: Vehicles in operation in US, by vehicle age, 2013-18
- Figure 14: Average age of cars, light trucks, and total light vehicles, 2002-13
- New car sales drive supply of CPO vehicles
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- Figure 15: Total US unit sales and forecast of new light vehicles vs. cpo vehicle sales, 2008-18
- Off-leases affect supply of CPO vehicles
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- Figure 16: New lease share of new vehicle financing, 2009-13
- High fuel prices help shift consumer purchasing preferences away from SUV CPO vehicles toward midsize cars and crossovers
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- Figure 17: All grades all formulations retail gasoline prices, dollars per gallon, 2000-14
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- Figure 18: Gasoline regular grade retail price including taxes, US average dollars per gallon, 2014-15 (forecast)
- CPO sales linked to consumer desire to shop at franchise auto dealers
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- Figure 19: Total franchise car sales, by percentage of total used car market, 2002-19
Leading Manufacturers
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- Key points
- Manufacturer overview
- Toyota, GM, Honda control half the CPO market
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- Figure 20: Total US unit sales of certified pre-owned vehicles, 2013
- A note on the manufacturer and dealers’ relationship
- Manufacturer profiles
- Toyota Motor Sales USA, Inc
- Overview
- Sales and market share
- CPO program details
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- Figure 21: Toyota, Scion, and Lexus certified pre-owned programs
- Retail sales, service, and parts
- Captive financing
- General Motors
- Overview
- Sales and market share
- CPO program details
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- Figure 22: GM certified pre-owned programs
- Retail sales, service, and parts
- Captive lending
- American Honda Motor Co Inc
- Overview
- Sales and market share
- CPO programs details
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- Figure 23: Honda certified pre-owned programs
- Retail sales, service, and parts
- Captive lending
- Ford Motor Company
- Overview
- Sales and market share
- CPO programs details
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- Figure 24: Ford certified pre-owned programs
- Retail sales, service, and parts
- Captive lending
- Volkswagen Group of America
- Overview
- Sales and market share
- CPO programs details
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- Figure 25: Volkswagen certified pre-owned programs
- Retail sales, service, and parts
- Captive lending
- Chrysler Group, LLC
- Overview
- Sales and market share
- CPO programs details
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- Figure 26: Chrysler certified pre-owned programs
- Retail sales, service, and parts
- Captive lending
- Nissan North America Inc
- Overview
- Sales, service and market share
- CPO programs details
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- Figure 27: Nissan certified pre-owned programs
- Captive lending
Car Dealerships
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- Key points
- Dealership overview
- Auto retailing is a highly competitive and fragmented space
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- Figure 28: Top 10 dealership groups in the US, by total number of used vehicle retail sales, 2013
- Total US franchise network levels out at around 18,000 locations
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- Figure 29: Number of dealerships selling new cars, 2003-14
- Major dealerships
- CarMax
- AutoNation
- Penske Automotive Group
- Sonic Automotive
Innovations and Innovators
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- Rental car agencies now offer option to rent or buy
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- Figure 30: Hertz Rent2Buy landing page, August 2014
- Carvana.com allows buyers to purchase used car from vending machine
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- Figure 31: Carvana.com, 2014
- Beepi brings certified pre-owned cars to direct online community
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- Figure 32: Beepi.com, August 2014
Marketing Strategies
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- Overview of the brand landscape
- Strategy: Raise awareness through compare and contrast
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- Figure 33: Ford Peace of Mind, July 2013
- Figure 34: Toyota Best New, Best Used, July 2014
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- Figure 35: Honda Why Shop Certified, July 2014
- Figure 36: Cadillac Certified Pre-owned, July 2014
- Strategy: Focus on the aspirational nature of the brand
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- Figure 37: Mercedes-Benz Stands Out from the Rest, July 2013
- Strategy: Paint risk of buying noncertified pre-owned vehicles
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- Figure 38: Ford Relax It’s Covered, July 2013
- Figure 39: Toyota Zombie Drive, July 2014
- Strategy: Market CPO as being no different than new car
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- Figure 40: Cadillac First Miles Warm-up, October 2013
- Figure 41: Mercedes-Benz Find the One, May 2014
Car Buyers who Expect to Purchase a CPO Vehicle
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- Key points
- 13% of expectant car buyers plan to purchase CPO
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- Figure 42: Car buyers who expect to purchase a New, Used, CPO vehicle, May 2014
- Women more likely to say they’ll purchase used vehicles
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- Figure 43: Car buyers who expect to purchase a New, Used, CPO vehicle, by gender, May 2014
- 18-34s more likely to say they’ll purchase used
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- Figure 44: Car buyers who expect to purchase a New, Used, CPO vehicle, by age, May 2014
- Households with incomes of less than $75K more likely to purchase used cars
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- Figure 45: Car buyers who expect to purchase a CPO vehicle, by household income, May 2014
- Those who expect to purchase CPO more likely to also select used
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- Figure 46: Car buyers who expect to purchase a CPO vehicle, May 2014
CPO Intenders Second Option: Pre-owned, or New?
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- Key points
- CPO intenders will purchase a regular used car if they cannot find what they want
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- Figure 47: Alternatives to a CPO vehicle for CPO intenders, May 2014
- Women more likely to say they’ll purchase used, while men are evenly split
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- Figure 48: Alternatives to a CPO vehicle for CPO intenders, by gender, May 2014
- CPO intenders with higher household incomes more likely to see new cars as the alternative
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- Figure 49: Alternatives to a CPO vehicle for CPO intenders, by household income, May 2014
- Millennial and Generation X CPO intenders more likely to opt for new car as backup
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- Figure 50: Alternatives to a CPO vehicle for CPO intenders, by generations, May 2014
Characteristics of Certified Pre-owned Car Purchase Intenders
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- Key points
- Nearly one in five households say their most recent car purchase was a CPO vehicle
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- Figure 51: New, Used or CPO vehicles already in household, May 2014
- CPO intenders more likely to own more than one vehicle
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- Figure 52: Number of household vehicles owned, May 2014
- CPO intenders more likely to say they’ll buy in the next year
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- Figure 53: Approximately when will the next CPO vehicle purchase occur, May 2014
- Vehicles most likely to be owned by CPO intenders include compact and midsize cars
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- Figure 54: Vehicle types already owned by CPO intenders, May 2014
- Majority of CPO intenders spent less than $30K on their last car purchase
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- Figure 55: Price of recently purchased vehicle, by CPO intenders, May 2014
- CPO intenders slightly more likely to be jointly responsible for vehicle purchase
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- Figure 56: Who will purchase the next CPO vehicle, May 2014
- Men more likely than women to be solely responsible for their CPO purchase
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- Figure 57: Who will purchase the next CPO vehicle, by gender, May 2014
- CPO intenders more likely to say they want a new vehicle to get better fuel economy
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- Figure 58: Reasons for wanting a new vehicle, by CPO intenders, May 2014
- CPO intenders more likely to consider sedans, family cars, and hatchbacks
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- Figure 59: CPO purchase intenders by vehicle type, May 2014
- Millennial CPO intenders more interested in alternatively fueled vehicles
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- Figure 60: CPO purchase intenders by vehicle type, by generations, May 2014
- Alternative fuel vehicle intenders, by CPO intenders
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- Figure 61: Alternative fueled vehicle considerations by CPO intenders, May 2014
- CPO intenders show more interest in crossovers/SUVs and compact cars
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- Figure 62: CPO purchase intenders by vehicle body style consideration, May 2014
Average Expected Payment for Next Car
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- Key points
- Plurality of CPO intenders care about the total price of the vehicle
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- Figure 63: Monthly payment or total price, May 2014
- Monthly payment more important to Millennials compared to other generations
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- Figure 64: Monthly payment or total price, by generations, May 2014
- CPO car intenders expect to spend approximately $21K on their next vehicle
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- Figure 65: Expected total price of next new car, May 2014
- Men expect to pay more for their CPO vehicle than women do
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- Figure 66: Expected total price of next CPO car, by gender, May 2014
- $75K+ households expect to pay $10K more on their next CPO vehicle
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- Figure 67: Expected total price of next CPO car, by household income, May 2014
- CPO intenders expect to pay 20% less on their monthly payments when compared to new car intenders
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- Figure 68: Expected monthly payment of next new car, May 2014
Words Associated with CPO Vehicles
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- Key points
- Buyers associate certified pre-owned more so with dealer certifications than manufacturer certified
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- Figure 69: Words associated with CPO vehicles, May 2014
- $50K+ households more likely to associate CPO with warranty
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- Figure 70: Words associated with CPO vehicles, by household income, May 2014
- Baby Boomers associate CPO with point inspections and dealer certifications more so than Millennials
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- Figure 71: Words associated with CPO vehicles, by generations, May 2014
- Suburban and rural more strongly associate CPO with vehicle history reports, dealer certification
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- Figure 72: Words associated with CPO vehicles, by area, May 2014
Automakers or Retailers Considered for CPO Purchase
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- Key points
- Toyota, Honda top considered automakers for CPO vehicles
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- Figure 73: Automakers or retailers considered for CPO purchase, May 2014
- CPO intenders from the western US prefer Hondas and Toyotas
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- Figure 74: Automakers or retailers considered for CPO purchase, by region, May 2014
- Millennials show higher consideration for Hyundai, Volkswagen and BMW in comparison to Baby Boomers
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- Figure 75: Automakers or retailers considered for CPO purchase, by generations, May 2014
- Urban areas show higher consideration toward Honda, Volkswagen and BMW CPO vehicles
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- Figure 76: Automakers or retailers considered for CPO purchase, by area, May 2014
Biggest Concerns when Selecting CPO Vehicle
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- Key points
- Chief concerns regarding a CPO purchase include price and reliability
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- Figure 77: Biggest concerns when selecting CPO vehicle, May 2014
- Price more a concern for lower income households
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- Figure 78: Biggest concerns when selecting CPO vehicle, by household income, May 2014
- No stark differences between concerns about CPO vehicles and generation
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- Figure 79: Biggest concerns when selecting CPO vehicle, by generations, May 2014
Most Important CPO Program Attributes when Selecting Vehicle
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- Key points
- Most important features for CPO intenders includes a bumper-to-bumper and powertrain warranties and vehicle history check
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- Figure 80: Most important features when selecting a CPO vehicle, May 2014
- Roadside assistance more important to households with children
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- Figure 81: Most important features when selecting a CPO vehicle, by presence of children in household, May 2014
- Baby Boomer, Generation X more interested in CPO warranties
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- Figure 82: Most important features when selecting a CPO vehicle, by generations, May 2014
- Special financing terms more sought after by urban CPO intenders
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- Figure 83: Most important features when selecting a CPO vehicle, by area, May 2014
Most Influential Features When Considering a CPO Vehicle
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- Key points
- CPO intenders say they’re more influenced by color and upholstery
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- Figure 84: Styling and comfort features important to CPO vehicle intenders, May 2014
- CPO intenders want a vehicle with smartphone integration
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- Figure 85: Tech and audio features important to CPO vehicle intenders, May 2014
- Millennials more interested in smartphone integration
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- Figure 86: Tech and audio features important to CPO vehicle intenders, by generations, May 2014
- CPO intenders show a higher degree of interest for blind spot warning and mirrors
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- Figure 87: Safety features important to CPO vehicle intenders, May 2014
Race and Hispanic Origin
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- Key points
- One in five Black car buying intenders interested in a CPO vehicle
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- Figure 88: Car buyers who expect to purchase a CPO vehicle, by race/Hispanic origin, May 2014
- Black household intent to buy another CPO vehicle, matched by those who’ve already purchased a CPO
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- Figure 89: New, Used or CPO vehicles already in household, by race/Hispanic origin, May 2014
- Hispanic CPO intenders significantly more interested in compact cars
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- Figure 90: CPO purchase intenders by vehicle body style consideration, by race/Hispanic origin, May 2014
- Hispanic and Black car purchase intenders care significantly more about monthly payment
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- Figure 91: Monthly payment or total price, by race/Hispanic origin, May 2014
- Non-Hispanics more concerned with specific aspects of CPO program
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- Figure 92: Words associated with CPO vehicles, by race/Hispanic origin, May 2014
- Hispanics far less interested in CPO vehicles from Ford, GM and Chrysler
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- Figure 93: Automakers or retailers considered for CPO purchase, by race/Hispanic origin, May 2014
- Hispanics more concerned with previous owner and title record of their CPO vehicle
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- Figure 94: Biggest concerns when selecting CPO vehicle, by race/Hispanic origin, May 2014
- Hispanics less interested in importance of warranty on their CPO vehicle
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- Figure 95: Most important features when selecting a CPO vehicle, by race/Hispanic origin, May 2014
Appendix – Other Useful Consumer Tables
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- Websites and apps visited by CPO intenders
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- Figure 96: Websites and apps visited by CPO intenders, May 2014
- Social media websites or apps visited by CPO intenders
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- Figure 97: Social media websites or apps visited by CPO intenders, May 2014
- Car buyers who expect to purchase a CPO vehicle
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- Figure 98: Car buyers who expect to purchase a CPO vehicle, by gender, May 2014
- CPO intenders second option: Pre-owned, or new?
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- Figure 99: Alternatives to a CPO vehicle for CPO intenders, by marital status, May 2014
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- Figure 100: Alternatives to a CPO vehicle for CPO intenders, by presence of children in household, May 2014
- Characteristics of CPO purchase intenders
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- Figure 101: Who will purchase the next CPO vehicle, by household income, May 2014
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- Figure 102: New, used or CPO vehicles already in household, by generations, May 2014
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- Figure 103: New, used or CPO vehicles already in household, by region, May 2014
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- Figure 104: Approximately when will the next CPO vehicle purchase occur, by generations, May 2014
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- Figure 105: Who will purchase the next CPO vehicle, by marital status, May 2014
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- Figure 106: CPO purchase intenders by vehicle type, by household income, May 2014
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- Figure 107: CPO purchase intenders by vehicle type, by presence of children in household, May 2014
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- Figure 108: CPO purchase intenders by vehicle body style consideration, by generations, May 2014
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- Figure 109: CPO purchase intenders by vehicle body style consideration, by area, May 2014
- Average expected payment for next car
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- Figure 110: Monthly payment or total price, by presence of children in household, May 2014
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- Figure 111: Monthly payment or total price, by residence, May 2014
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- Figure 112: Expected total price of next CPO car, by generations, May 2014
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- Figure 113: Expected total price of next CPO car, by marital status, May 2014
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- Figure 114: Expected total price of next CPO car, by household size, May 2014
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- Figure 115: Expected total price of next CPO car, by presence of children in household, May 2014
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- Figure 116: Expected monthly payment and total price of next CPO car, May 2014
- Words associated with CPO vehicles
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- Figure 117: Words associated with CPO vehicles, by marital status, May 2014
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- Figure 118: Words associated with CPO vehicles, by gender, May 2014
- Automakers or retailers considered for CPO purchase
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- Figure 119: Automakers or retailers considered for CPO purchase, by gender and age, May 2014
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- Figure 120: Automakers or retailers considered for CPO purchase, by household income, May 2014
- Biggest concerns when selecting CPO vehicle
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- Figure 121: Biggest concerns when selecting CPO vehicle, by marital status, May 2014
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- Figure 122: Biggest concerns when selecting CPO vehicle, by presence of children in household, May 2014
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- Figure 123: Biggest concerns when selecting CPO vehicle, by region, May 2014
- Most important CPO program attributes when selecting vehicle
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- Figure 124: Most important features when selecting a CPO vehicle, by household income, May 2014
- Most influential features when considering a CPO vehicle
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- Figure 125: Styling and comfort features important to CPO vehicle intenders, by household income, May 2014
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- Figure 126: Styling and comfort features important to CPO vehicle intenders, by marital status, May 2014
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- Figure 127: Styling and comfort features important to CPO vehicle intenders, by presence of children in household, May 2014
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- Figure 128: Styling and comfort features important to CPO vehicle intenders, by generations, May 2014
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- Figure 129: Styling and comfort features important to CPO vehicle intenders, by area, May 2014
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- Figure 130: Tech and audio features important to CPO vehicle intenders, by household income, May 2014
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- Figure 131: Tech and audio features important to CPO vehicle intenders, by marital status, May 2014
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- Figure 132: Tech and audio features important to CPO vehicle intenders, by presence of children in household, May 2014
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- Figure 133: Tech and audio features important to CPO vehicle intenders, by area, May 2014
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- Figure 134: Safety features important to CPO vehicle intenders, by gender, May 2014
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- Figure 135: Safety features important to CPO vehicle intenders, by presence of children in household, May 2014
- Race and Hispanic origin
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- Figure 136: Car buyers who expect to purchase a CPO vehicle, by race/Hispanic origin, May 2014
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- Figure 137: Who will purchase the next CPO vehicle, by race/Hispanic origin, May 2014
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- Figure 138: Approximately when will the next CPO vehicle purchase occur, by race/Hispanic origin, May 2014
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- Figure 139: Expected total price of next CPO car, by race/Hispanic origin, May 2014
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- Figure 140: Styling and comfort features important to CPO vehicle intenders, by race/Hispanic origin, May 2014
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- Figure 141: Alternatives to a CPO vehicle for CPO intenders, by race/Hispanic origin, May 2014
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- Figure 142: CPO purchase intenders by vehicle type, by race/Hispanic origin, May 2014
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- Figure 143: Tech and audio features important to CPO vehicle intenders, by race/Hispanic origin, May 2014
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- Figure 144: Safety features important to CPO vehicle intenders, by race/Hispanic origin, May 2014
Appendix – Trade Associations
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