With 2.11 million certified pre-owned sales in 2013, according to Autodata Corp. Sales have grown year-over-year for the past three years, though, 2013 marked the first year over the 2 million units sold.
What does 2014 look like? The supply of used vehicles that would qualify as a certified used car will be about the same from 2013. Though, the good news is according to the NADA Used Car Guide we will see an approximate 18-percent year-over-year increase in off-lease volume, which was only at a 14-percent increase in 2014. Lease returns will be supplying a fair amount of vehicles that will likely qualify to be sold as certified pre-owned vehicles. This creates more availability for the franchised dealers inventory and more vehicles choices for consumers.
Jonathon Banks of NADA Used Car Guide has commented on the prediction of certified used car sales in 2014 stating that the 2.11 million units will likely be “blown away” by the sales in 2014.
“We think that 2.1 million certified pre-owned sales (figure) … will be blown away, driven the availability of lease returns that will inevitably come back in 2014,” Banks said.
The inventory will be solid in 2014 for consumers looking for certified pre-owned vehicles. Are there consumers out there looking for certified used cars?
“We don’t have a specific figure, but to put it in perspective, CPO sales represent roughly 12 to let’s say 14 percent of all franchised dealer sales. That’s a small number. So, there’s a lot of opportunity for growth there – even if you’re talking about going up to even 30 percent, which is still a fairly small number, but a big jump from where we are today,” Larry Discon senior managers of market intelligence at NADA Used Car Guide, told Auto Remarketing in an interview at the NADA convention.
In regard to consumer demand on certified pre-owned vehicles, Banks added, “It’s tapped, but the spicket hasn’t even been opened yet.
Taking into consideration the entire condition of our economy. Where the consumers are in their financial security. We are looking at high levels of unemployment, consumers driving their cars longer and now needing replacement vehicles, and a bit of instability in overall economic market. This makes for a strong market for certified used vehicles.
Dealers know what is to come, therefore the automakers are investing into their certified used programs. Working to increase attention and awareness amongst buyers.
So what kind of sales growth are we looking at? In the 2014 Used Car Market Report, Manheim Consulting put a number on the certified pre-owned sales target: 4 million. Seeing the growth first hand, CertifiedCars.com believes that this number could be met sooner than expected.
Manheim’s report states “The certified pre-owned markets has the potential to grow to more than 4 million units per year, in short order. It is only a matter of how much marketing muscle the manufacturers want to put behind the programs – and, of course, the dealer’s ability to continue to earn good profits on the sales.”
As Manheim’s Tom Webb stated during the NADA press conference: “I can pretty much guarantee that certified used sales are going to hit a record again this year.”
Bottom line, certified used cars are on the rise, an economically sound choice for dealers and consumers. Consumers understand they can lose thousands of dollars just by driving a new car off of the lot. Buying certified used cars offer the perks of a new car without the depreciation.