MCLEAN, Va., July 26, 2016 /PRNewswire/ -- Results from a new survey on certified pre-owned (CPO) vehicle programs finds consumers are not fully aware of how they differ from new or used vehicle purchase options.
The study, commissioned by NADA Used Car Guide, found most age groups have similar awareness levels:
- 50 percent of 18- to 34- year-olds stated they were either slightly, or not at all, familiar with CPO programs.
- 40 to 44 percent of respondents (35 to 75-plus years old) reported similarly low familiarity with CPO programs.
Analysts found the sex of survey respondents correlated to a greater divide in certified pre-owned vehicle awareness. According to results in the August 2016 Perspective report:
- Over one third of male respondents indicated they were slightly, or not all, familiar with CPO programs.
- 39 percent of male respondents felt moderately to extremely familiar with certified pre-owned programs.
- 23 percent of male respondents reported being somewhat familiar with CPO programs.
Women were less knowledgeable, with nearly 60 percent expressing little to no familiarity with the certified vehicle purchase option. Also, fewer than 25 percent of female respondents felt they were moderately or extremely familiar with CPO programs.
When asked, "What type of vehicle will you consider buying in the future?":
- 8 percent of respondents declared they would only consider buying CPO in the future.
- 17 percent stated they would strictly shop for new vehicles.
- 44 percent answered they would strictly buy used vehicles.
While the number of CPO-only shoppers was small, 27 percent of respondents stated their willingness to consider CPO alongside either a new or used vehicle.
When asked, "How likely are you to consider purchasing a Certified Pre-Owned vehicle in the future?" 52 percent of 18- to 34-year-old respondents stated they were neutral in their commitment to a future CPO purchase.
Survey respondents were also asked to select a dollar amount they would be willing to pay for a certified pre-owned vehicle above and beyond a non-CPO used vehicle. The question was prefaced with a series of common CPO program benefits — comprehensive inspection and reconditioning requirements, an extended bumper-to-bumper warranty, etc. — to help respondents assign value.
How Much More Should CPO Vehicles Cost?
Currently, NADA Used Car Guide's mainstream and luxury brand CPO premium data indicates 68% of premiums are $800 to $1,800. At the low end of the spectrum, the 2011 Smart FORTWO currently has a $400 premium over its non-certified version. At the high end, late-model vehicles such as the 2015 Porsche 911 currently carry a $3,500 premium over non-certified versions.
When asked, "How much of a premium would you be willing to pay for a certified pre-owned vehicle versus a non-certified used vehicle?":
- 39 percent surveyed were willing to pay up to $1,000 more for a CPO vehicle versus a non-certified used vehicle.
- 31 percent stated they weren't willing to pay any premium for a CPO vehicle.
- 31 percent of responders answered with a willingness to pay within a spread of $1,000 – $2,000, to more than $4,000 for a CPO vehicle over a non-certified option.
What does it all mean?
Jonathan Banks, executive analyst at NADA Used Car Guide said, "What the data tells us is that there is an opportunity for the industry to make consumers more aware of the availability of manufacturer certified pre-owned vehicle programs."
Larry Dixon, senior manager of market intelligence at NADA Used Car Guide added, "There is also an opportunity to educate consumers on the benefits of CPO vehicle ownership and why it may be worth paying more over a non-certified used vehicle."
About the Survey
NADA Used Car Guide's 2016 Certified Pre-Owned Consumer survey was conducted on NADAguides.com from May 27 to June 3, 2016.
The multiple choice survey was conducted on NADAguides.com to:
- Assess consumer awareness of CPO programs
- Measure consumer future CPO purchase considerations
- Determine the premium (if any) consumers would be willing to pay for a CPO vehicle versus a non-certified used vehicle
About NADA Used Car Guide
Since 1933, NADA Used Car Guide® has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the United States and worldwide. Its editorial team collects and analyzes over 1 million combined automotive and truck wholesale and retail transactions per month. Its guidebooks, auction data, analysis and data solutions offer automotive/truck, finance, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. Visit nada.com/b2b to learn more. NADA Used Car Guide® and its logo are registered trademarks of National Automobile Dealers Association, used under license by J.D. Power and Associates.
Sr. Manager, Public Relations
NADA Used Car Guide®, a division of J.D. Power and Associates
1-202-826-4029 | email@example.com
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SOURCE NADA Used Car Guide