The combination of consumer demand, increasing off-lease supply, and record-setting lease penetration is creating what could be sustainable momentum for the certified pre-owned (CPO) market.
To provide context, consider the following market dynamics:
- Lease originations exceeded 3.5 million in 2014, Manheim reports—their highest level since 2000.
- CPO sales increased nearly 11% last year and accounted for 20% of used car sales in 2014, according to Edmunds.com.
- TrueCar notes that CPO sales this year will total more than 2.5 million units, predicting 2015’s supply of one-to-five-year-old used vehicles, including CPO, at 10.4 million units.
As these market dynamics unfold, used car managers will need to source CPO inventory more wisely than their competition. To help stay ahead and grow market share, I suggest two strategies:
- Obtain CPO inventory from nontraditional sources.
- Get ahead of banks and lenders, lease-conquest marketers, and other dealers before lease-end.
Executing these strategies effectively will require a proactive and data-driven strategy. For example, intentional off-lease marketing using data-mining software enables you to bring consumers back into the market earlier than they otherwise would have considered and before the traditional 120-day lease-end campaign.
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