Shoppers of certified pre-owned vehicles love to cross shop across categories, comparing CPOs to new cars and used cars. In fact, 80 percent of all CPO shoppers are inherently cross-shoppers, according to Cars.com research[i].
According to a recent survey of CPO automobile shoppers, they are actively comparing CPOs against both new and used cars. We found that of all CPO shoppers[ii]:
- 40 percent compare CPOs against used cars during their research.
- 29 percent compare CPOs against used cars, new cars, and other CPOs.
- 20 percent compare CPOs against other CPOs.
- 12 percent compare CPOs against new cars.
The data suggest that dealerships need to work hard to educate CPO shoppers about the benefits of CPOs when compared to each category. For instance:
- CPO shoppers who are also looking at used cars will certainly notice that CPOs are more expensive than used cars. Dealerships should reinforce how CPOs bring peace of mind to shoppers who might be interested in a used car but may have reservations about buying a vehicle that was owned by someone else. For instance, dealerships should be prepared to discuss the type of extended warranty coverage that a CPO typically provides.
- On the other hand, CPO shoppers who are also looking at new cars may be concerned about missing out on the benefits of having the newest model of a car that interests them, such as latest infotainment features. Shoppers’ criterion for comparing a new versus CPO may be more nuanced and complex. Dealers will want to listen carefully to what is motivating the shopper to compare the two types of vehicles. A newer model CPO may give them most of the benefits they seek with a new car without the depreciation that comes with buying new. And a CPO may actually offer more features than, say, a base model new car.
As with any kind of shopper, dealerships should assume CPO shoppers will research their options before they visit the lot. They might come across insights about CPOs on sites such as our own. At any rate, their motivations may be complicated as they weigh the costs and benefits of CPOs against used and new cars. Listen to their core motivations and offer alternatives to address them.
[i] Cars.com segmentation survey, Fall 2017.
[ii] The numbers do not add up to 100 percent due to rounding