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Certified Pre-Owned Cars - US - July 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Overall purchase intent trending downward
Figure 1: Purchase intent, July 2016-April 2017
Less than two in 10 car shoppers considering a CPO vehicle for their next purchase
Figure 2: Purchase type, April 2017
Awareness of certified pre-owned programs limit interest
Figure 3: CPO awareness, by car shoppers, April 2017
The opportunities
CPO shoppers expect to pay $8,000 more than used car shoppers
Figure 4: Purchase type, by purchase price, April 2017
Pricing and low mileage can attract non-CPO shoppers
Figure 5: CPO influencers – Not considering CPO, April 2017
Younger women can be converted to CPO inventory
Figure 6: CPO awareness and consideration, by gender and age, April 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Certified pre-owned expected to grow
Off-lease vehicles provide prime CPO inventory
New vehicle incentives erode CPO demand
MARKET SIZE AND FORECAST
CPO sales growth expected to continue
Figure 7: Total US unit sales and fan chart forecast of certified pre-owned vehicles, forecast, 2012-22
Figure 8: Total US unit sales and forecast of certified pre-owned vehicles, 2012-22
MARKET BREAKDOWN
Leasing grows as percentage of market share
Figure 9: Method of acquisition, by most recently acquired vehicle, 2013-17
Foreign brands grow share in CPO sales
Figure 10: Most recently acquired CPO vehicle, by domestic and foreign, 2013-17
MARKET PERSPECTIVE
New vehicle incentives reduce appetite for CPO
MARKET FACTORS 
Off-lease vehicles increase supply of prime CPO-qualified inventory
Figure 11: Method of acquisition, by most recently acquired vehicle, 2013-17
High consumer confidence should boost sales
Figure 12: Consumer Sentiment Index, January 2007-April 2017
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Top four brands top CPO sales as well
Growth for Nissan will spur CPO sales
Dealerships leasing CPO inventory
Certified pre-owned programs lack exposure to overall market
BRAND SALES OF CPO VEHICLES
Ford, Chevrolet, Toyota, and Honda make up nearly half of all CPO sales
Figure 13: Brand of most recent vehicle purchase, by CPO buyers, 2017
WHAT’S WORKING?
Certified pre-owned market on cruise control
CPO sales similar to new vehicle sales
WHAT’S STRUGGLING?
Overall awareness of CPO programs is lacking
WHAT’S NEXT?
Leasing CPO vehicles
Figure 14: Infiniti CPO leasing acquisition email, email, August 2016
Figure 15: Certified Pre-Owned by Mercedes-Benz Sales Event, direct mail, February 2015
THE CONSUMER – WHAT YOU NEED TO KNOW 
Shoppers considering CPO expect to spend $8,000 more than used shoppers
Awareness of CPO programs an issue
Price and low mileage top enticements for non-CPO shoppers
PURCHASE INTENT
Nearly six in 10 consumers plan to buy a vehicle within the next three years
Figure 16: Purchase intent, April 2017
Purchase intent trending downward
Figure 17: Purchase intent, July 2016-April 2017
PURCHASE TYPE
CPO consideration low
Figure 18: Purchase type, April 2017
Younger women likely to consider CPO despite lower awareness
Figure 19: Purchase type, by gender and age, April 2017
EXPECTED PRICE
Nearly six in 10 car shoppers plan to pay more than $25,000 on next vehicle
Figure 20: Expected price, April 2017
Figure 21: Expected price – Mean and median, April 2017
CPO shoppers expect to pay $8,000 more than used car shoppers
Figure 22: Purchase type, by purchase price – Mean and median, April 2017
CPO AWARENESS
Awareness and education an issue for CPO programs
Figure 23: CPO awareness, April 2017
Figure 24: BMW Certified Pre-Owned “Wash,” January 2017
Figure 25: BMW Certified Pre-Owned “Shopping Cart,” January 2017
Younger women least likely to know much about CPO programs
Figure 26: CPO awareness, by gender and age, April 2017
CPO INFLUENCERS
Price and low mileage attractive for nonshoppers
Figure 27: CPO influencers – Not considering CPO, April 2017
TURF analysis for shoppers not considering CPO
Figure 28: TURF analysis – CPO influencers, April 2017
Blacks receptive to dealership perks
Figure 29: CPO influencers – Not considering CPO, by ethnicity and Hispanic origin, April 2017
Price and clean history report are top reasons for CPO shoppers
Figure 30: Mercedes-Benz Certified Pre-Owned Sales Event, direct mail, May 2017
Figure 31: CPO influencers – Reasons for choosing CPO, April 2017
Figure 32: TURF analysis – Reasons for choosing CPO, April 2017
BRANDS CONSIDERED FOR CPO
Top-selling brands get top responses for consideration
Figure 33: Brands considered for CPO, April 2017
Toyota and Honda outperform among CPO shoppers
Figure 34: Brands considered for CPO, by purchase type, April 2017
ATTITUDES TOWARD CERTIFIED PRE-OWNED
Majority of shoppers associate used purchases with risk
Figure 35: Attitudes toward CPO, April 2017
CPO inventory can expand luxury brand reach
Figure 36: Attitudes toward certified pre-owned, by purchase type, April 2017
Younger shoppers receptive to extended warranties
Figure 37: Attitudes toward CPO, by gender and age, April 2017
CLUSTER ANALYSIS
Figure 38: Certified pre-owned segments, April 2017
New Car Buyers
Characteristics
Opportunities
Figure 39: Profile of New Car Buyers, April 2017
CPO Skeptics
Characteristics
Opportunities
Figure 40: Profile of CPO Skeptics, April 2017
Bargain Seekers
Characteristics
Opportunities
Figure 41: Profile of Bargain Seekers, April 2017
Ideal CPO Shoppers
Characteristics
Opportunities
Figure 42: Profile of Ideal CPO Shoppers, April 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
Methodology – TURF analysis
APPENDIX – THE MARKET 
Figure 43: Market share of certified pre-owned vehicles purchased, by most recently acquired vehicle, 2015-17
Figure 44: Market share of certified pre-owned vehicles, by most recently acquired vehicle, 2013-14

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