“These programs are a recognition that the used car business is in an unprecedented era of challenges with regard to the purchase of used cars,” said Brian Finkelmayer, senior director of Cox Automotive.
Ryan Hall, executive manager of HGreg Nissan Kendall outside of Miami, said the expanded Nissan CPO program will help retailers work with economical supplies of new cars.
“I don’t think Nissan would have gone that route if the new car inventory had been healthy,” Hall said. “It’s about getting people to come to the store because our supply of new cars is halved.”
CPO programs can be drivers of profit by increasing transaction prices and sales turnover.
According to JD Power, in the first quarter of 2022, the gross profit from a CPO car from the main brand was $ 587 higher than from a car without a CPO.
CPO transaction prices were $ 1,095 higher than for uncertified vehicles, and CPO vehicles were sold 10 days earlier.
Finkelmeier said Nissan’s limited warranty on non-branded cars is a “relatively low-risk profit opportunity” for the automaker.
“The CPO guarantee extends to transmission and transmission,” he said. “How often do we have catastrophic transmission failures?”
An expanded CPO program, including non-Nissan-compliant vehicles, can help franchise dealers compete with large independent retailers such as CarMax and Carvana.
“It gives us a much better base against retail startups and puts us in a position of strength,” Slade said.
Despite this, due to higher prices for used cars at auction, dealers may be hesitant to pay extra for certification.
“When I pay $ 20,700 [at auction] Do I want to add another $ 400 for a car that sells for $ 20,000? ”Finkelmeier said.