Certified Pre-Owned Vehicle Sales Spike On Dealer Incentives

Certified Pre-Owned vehicles--pre-owned cars and trucks coming off lease that undergo rigorous multi-point inspections before being sold under manufacturer warranty--are hotter than ever, thanks to dealer incentives, and record numbers of vehicles coming off lease.

CPO sales broke records in March, fell in April and nearly broke all-time records again in May, with Autodata Corp. in Woodcliff Lake, N.J. reporting May CPO sales at 155,565, the second-highest ever and 7.8% higher than the month last year.

The company reported that several automakers made personal CPO records in May. Honda, and Nissan, as well as luxury brands Porsche and BMW, reported all-time high sales of certified pre-owned vehicles.

  • Honda sold 20,713 certified vehicles in May versus 16,164 vehicles in the month last year, and 19,563 units in March.
  • Nissan sold 5,155 certified vehicles in May, versus 3,764 units in the month last year.
  • Toyota sold 25,199 vehicles, compared with 22,658 certified units sold last May.

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Chrysler Group, which last year launched its "Brand Spankin' Used" CPO program, posted a May record of 11,243 certified pre-owned vehicles, up 10.6% from 10,164 units for the month last year. Chrysler's year-to-date sales of 53,829 units constitute an increase of 6.5% over year-to-date sales last year. The company says Chrysler division leads led with a 5% increase from May 2006, posting sales of 3,948 units. Dodge increased 11% and Jeep 21%.

General Motors sold 45,892 CPO vehicles, up 3% from last May. Year to date, GM sold 227,365 CPO units, also a 3% increase over the same period last year. Although CPO sales of Cadillac, Saturn, Hummer, Buick and Saab were down, Chevrolet and Pontiac--constituting GM's largest volume--were up 3% and 32%, respectively.

Ford Motor Co. sold 15,434 units among its Ford, Lincoln and Mercury brands.

Beverly Weiss, an analyst at Autodata, says that even though, on average, domestic CPO sales were up last month--GM by 4.8%, Chrysler by 10.6%, and Ford down 1.6%--they lost share of the certified market because of the increase in the Asian market. Honda was up 24.9%, Toyota 12.7%, Nissan 39%. "So the domestics were simply up a smaller amount," she says.

The European brands were less uniform. BMW had light CPO sales because, per Weiss, the company's volume of off-lease vehicles has been high.

Weiss says part of the reason CPO sales are booming is because automakers have given dealers incentives to lease. "Right now, the manufacturers are doing more leasing, and the lease penetration rate on the new-car side has been going up, since the incentive rates for new cars started to go up. A lot of manufacturers are now encouraging dealers to certify vehicles and are, in some cases, offering incentives to dealers."

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