Certified Pre-Owned Vehicle Checklist
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2013 Cover.qxp 8/26/2013 2:44 PM Page 1 AN-Supplement Landscape_AN-Supplement Landscape.qxd 8/21/2013 12:14 PM Page 1 ARE YOU EXPLOITING THE FULL POTENTIAL OF CERTIFIED PRE-OWNED SALES? An Effective CPO Program Benefits OEMs, Dealers and Customers A robust Certified Pre-Owned (CPO) sales strategy effectively stabilizes residual values. This has a positive impact on new car sales, improves profit and creates new revenue streams. STREAMLINING REMARKETING RAISING REVENUES WITH CPO SALES. PROCESSESES. CPO vehicles make up a growing percentage Efficiency is key to a successful remarketing of today’s total vehicle sales. In fact, CPO sales strategy – not only providing checks and increased by seven percent worldwide during balances along every step of the remarketing the first half of 2012. Effective remarketing process, but also establishing the necessary is a win-win situation for OEMs, dealers and too long, can result in a loss of thousands of Scheduled Maturity Analytics and Planning framework to ensure that return vehicles are customers alike. While customers value the dollars per month. Residual Value Management Consulting sold for the maximum price with the lowest peace of mind that comes from knowing Pre-Owned Sales Manager Training possible operational costs. There are three CPO vehicles have the manufacturer’s seal Therefore, dealers require comprehensive Dealership CPO/Pre-Owned key factors for OEMs to keep in mind when of approval, dealers also can benefit from an pre-owned solutions that reduce turn time Coaching Solutions developing a remarketing strategy: increased bottom line from higher sales and on vehicles, improve service throughput and CPO Sales and Merchandising Training service revenues. increase the number of pre-owned leads. They CPO Dealership Compliance Solutions 1. It should limit the amount of leased vehicles also require training on how to best package, sent directly to auction which lowers vehicle OEMs profit from improved residual values, present and sell a CPO and pre-owned vehicle, For more information about how MSXI can help prices and drives down the residual value and increased long-term customer loyalty as thereby maximizing the flow of inventory and you boost CPO and Pre-owned vehicle sales, of vehicles. This results in limited financial a result of warranty enrollments and service boosting the bottom line. maximize inventory flow and increase gross services support for new vehicle sales. requirements. Additionally, stabilizing residual profits, please visit www.msxi.com. values has a direct effect on new car sales A STRONG REMARKETING PARTNER 2. Vehicles should be serviced with original since it allows dealers to lower leasing rates, SERVES OEM AND DEALER NEEDS. OEM parts and by factory-trained making them more attractive and competitive. MSXI is the leading global provider of Retail technicians. This will improve the long-term Furthermore, revenues from pre-owned vehicle Network Solutions (RNS) to OEMs and value and overall condition of an OEM’s sales are multiplied in every department of the dealerships. The company partners with vehicles in the pre-owned market. dealership – sales, service, parts and finance. automakers to enhance the retail customer 3. It should utilize a dedicated, experienced experience by streamlining business processes partner to assist in the development, Extended warranty and service plans are more to increase performance and positively affect implementation and monitoring of the likely to be considered by the customer with customer acquisition and retention, technical remarketing strategy. This will ensure the a CPO vehicle purchase. However, unlike support and training, and warranty management. success of the strategy. new vehicles, pre-owned units depreciate on This includes reinforcing your existing CPO a daily basis. This, combined with the cost of capability and strengthening existing business keeping vehicles on the lot or in the showroom processes. Our solutions include: p 03 final.qxp 8/26/2013 2:45 PM Page 1 INTRODUCTION Arlena Sawyers “The vehicles are relatively low miles, you know who the [email protected] [previous] owner is, they are clean and they are in good ales of certified used vehicles jumped 15 percent shape, and the miles are all managed at the end of the lease this year through July from a robust year-earlier term because leases are based on 12,000 or 15,000 miles period, with many brands registering double-digit max. Sincreases. “One of the dealer’s biggest problems is finding good Through the first seven months of this year, the industry’s sources for used vehicles. The lease return is the absolute certified used-vehicle sales totaled 1,229,324 units, accord- best source.” ing to data compiled by the Automotive News Data Center Cadillac is among the companies that upgraded their cer- and Autodata Corp. That comes after a strong 2012, when tified used-vehicle programs over the past year. GUIDE TO the industry sold a record 1,834,766 certified vehicles, a 5 In May, Cadillac reinstated a bumper-to-bumper warran- percent gain over 2011. Before 2011, the record of 1,694,929 ty on its certified used vehicles, a move the luxury brand CERTIFIED PRE-OWNED was set in 2008. said made it more competitive with rivals’ programs. Assisting the certified sales surge is the increase in the The warranty covers six years or 70,000 miles, starting VEHICLE PROGRAMS number of off-lease vehicles re-entering the market this from the time the vehicle was bought new. It is two years year, say industry experts and manufacturers. and 20,000 miles longer than Cadillac’s new-vehicle war- Data from NADA Used Car Guide show the number off- ranty and replaces a 6-year/100,000-mile limited warranty lease vehicles returning to the market annually bottomed on certified used vehicles. out in 2012 and now is rebounding. contents The guide predicts that 1.6 million off-lease units will re- Expanded warranty turn to the market this year, up from 1.4 million in 2011. The new warranty covers items such as paint, wheels, in- Certified pre-owned vehicle checklist ......................4 That number is expected to rise to 1.9 million in 2014. terior and exterior trim, headlights and mirrors, which were Larry Dixon, an analyst at the guide company, said growth not covered by the previous program. Acura, Audi, Bentley, BMW, Cadillac .......................5 in off-lease supply was expected to fuel certified pre-owned The results are measurable. In the first seven months, sales. Cadillac’s certified used-vehicle sales improved 11 percent Chrysler Group, Ford Motor, General Motors, “While we do not have a specific forecast for CPO sales, to 11,015. In 2012, the brand’s certified sales dropped 28 data suggests that sales growth will be in the double digits percent to 16,609. Honda, Hyundai ...........................................6 this year,” said Dixon, citing sales so far this year. “Cost- Before April 2009, certified used Cadillacs were covered by conscious consumers increasingly realize that CPO units a bumper-to-bumper warranty similar to the new program. Infiniti, Jaguar, Kia, Land Rover, Lexus ...................7 provide the peace of mind associated with purchasing a But the coverage was reduced because of General Motors’ new vehicle but without the higher price tag.” 2009 bankruptcy restructuring. Lincoln, Maserati, Mazda, Mercedes-Benz, Among the companies experiencing strong growth is Though certified sales are soaring, not all dealers are par- taking. Mini ............................................................8 Hyundai Motor America. Its sales of certified used vehicles through July increased 13 percent to 44,157. Tim Walters, owner of Walters Elkland Chevrolet in Elkland, Mitsubishi, Nissan, Porsche, Rolls-Royce, Pa., said, “I’m in the opposite camp only because I’m having a Hyundai’s strong growth hard time sourcing them; not that I have anything against the Smart..........................................................9 Dave Zuchowski, Hyundai’s U.S. sales boss, says a grow- program.” Before the recession, Walters did a lot of leasing ing inventory of off-lease vehicles over the past three years and depended on vehicles returned by his customers to help Subaru, Toyota, Volkswagen, Volvo ......................10 has helped the brand boost certified used-vehicle sales “ex- replenish his certified used-vehicle inventory. ponentially.” Its sales in 2012 surged 43 percent to 70,049, But in 2009 when industrywide leasing all but dried up, he Glossary of terms................................................10 and Zuchowski says Hyundai’s certified sales could rise to lost most of his lease customers. The off-lease GM vehicles as many as 80,000 this year. offered at auctions cost more than he wants to pay. So he Certified pre-owned vehicle sales, He says the company expects about 48,000 off-lease units buys a lot of used non-GM vehicles to keep his used-vehicle to return to the market this year, about 80,000 in 2014 and operation going. 2012 by month..........................................11 the number will continue to grow in 2015. Walters added: “Obviously, I can’t certify those.”c Sponsored by 3 p 04 final.qxp 8/26/2013 2:46 PM Page 1 CERTIFIED PRE- OWNED VEHICLE CHECKLIST Interior Underhood Ⅺ air conditioning Ⅺ fabric/leather Ⅺ odors Ⅺ alternator Ⅺ fans Ⅺ power steering Ⅺ airbags Ⅺ fuel and trunk release Ⅺ panel Ⅺ battery Ⅺ filters Ⅺ pumps Ⅺ alarm Ⅺ glove box/compartments Ⅺ power outlets Ⅺ belts Ⅺ hoses Ⅺ radiator Ⅺ antenna Ⅺ head restraints Ⅺ power windows Ⅺ cables Ⅺ