number of CPO vehicles sold in US are increasing dramatically
Number of CPO (Certified Pre-Owned) vehicles sold in USA.
Source: CNW Marketing Research
The number of Certified used cars (CPO) sold jumped from around 450,000 in 1997 to 1,375,000 in 2004, and over 2 millions in 2011, according to CNW. Once upon a time, buying a used car could be risky business; there was no telling what kind of wear and tear a vehicle had seen. The second-hand automobile didn't come with a warranty, let alone a manufacturer's seal of approval. And there certainly weren't any cut-rate financial incentives to entice the unfortunate used-car shopper. But times have changed. Today, the era of the manufacturer certified pre-owned vehicle is in full swing. In fact, some experts say CPO is now a legitimate third automobile category, joining traditional stalwarts new and used. For those who haven't yet been exposed to the CPO marketing blitz from leading auto manufacturers, the basic concept of the certified pre-owned vehicle — automotive speak for reconditioned used cars— is relatively simple. Automobile manufacturers take their late-model used vehicles (usually less than five years old), put them through a fairly rigorous inspection process, attach an extended warranty and other perks, and sell them at a premium to the used-car-buying public.
The benefit to consumers is clear: Many find themselves getting a like-new car with new-car-like peace of mind. Not only do they get these benefits at a used-car price, but they're often able to enter a vehicle segment (luxury, sport utility vehicle, etc.) they otherwise couldn't afford. For manufacturers, certification programs allow them to drive up used-car values, extend their brands and increase turn rates on used vehicles. Though on the decline, there are still significant volumes of off-lease units; approximately 2.5 million such vehicles will be returned to manufacturers in 2005, according to CNW Marketing Research. High off-lease volume provides plenty of options for the certified used car shopper. Match these statistics with consumer frugality, and you can see why manufacturer-certification programs are more popular than ever. Certification programs were pioneered by luxury nameplates, such as Lexus and Mercedes-Benz, as a marketing tool to sell off-lease vehicles in the late 1980s and early 1990s. As the decade wore on, leasing grew. Leases accounted for 24.4 percent of all new-car deals in 1999 — the highest lease rate in history. More auto manufacturers, which used to send such vehicles to rental car companies or used-car lots, saw the benefit of selling them directly to consumers. When that glut of almost-new vehicles began to flood the market, manufacturer-certified used-car programs quickly became the cost of doing business for all automakers.
