Sales and awareness of certified pre-owned vehicles continue to increase, despite competition from aggressive new-vehicle incentives, according to the J.D. Power and Associates 2003 Used Vehicle Sales and Certification Study(SM).
The study, which measures the satisfaction and experiences of owners of late-model used vehicles that have undergone a dealership certification process, finds that sales of certified pre-owned (CPO) vehicles has increased to 38 percent -- up 3 percent over 2002. Consumer awareness of CPO programs also continues to increase. Fifty-seven percent of all used-vehicle buyers are now familiar with the programs before beginning the shopping process -- up from 54 percent in 2002.
"The late-model used-vehicle market has been directly affected by the heavy use of incentives over the past two years as potential buyers are lured by the alternative of purchasing a new vehicle," said Todd Wilson, director of retail distribution research at J.D. Power and Associates. "Yet, the market for certified pre-owned vehicles continues to grow."
The study finds that CPO buyers are more satisfied with their vehicles and the dealership sales experience than are non-certified buyers. In turn, CPO buyers indicate a much higher likelihood to return to the selling dealership for repairs, routine maintenance and future purchases.
On average, luxury buyers paid nearly $3,000 more for their certified used vehicle than did buyers of non-certified luxury brands, while non-luxury buyers paid $1,000 more.
"Without question, consumers rate the warranties that come with CPO vehicles as the most valuable feature of the programs, and they're willing to pay more for the added peace of mind," said Wilson.
For the second year in a row, the Lexus certified pre-owned program ranks highest in customer satisfaction by a substantial margin. Lexus tops the industry in areas such as shopping experience and vehicle quality, as well as program features accompanying certification.
The 2003 Used Vehicle Sales and Certification Study measures the experiences of almost 16,000 used-vehicle owners who purchased their vehicles in late 2002. Bumper-to-bumper warranties, mechanical inspections, service plans and roadside assistance are some of the program features that were rated by consumers.
Courtesy J.D. Power and Associates
