Like the Edsel, “As Is” Is No More

For years, buyers have come to know the term ‘As Is’ when it comes to the sale of a used car—and these two words can cover a multitude of vehicle sins. They also serve to instantly put the buyer on their guard. Not so long ago, ‘As Is’ was just the way it was for the used car dealer and the used car buyer, because there was no alternative. Then, along came OEM-sponsored CPO (certified pre-owned) programs, which, after two decades, have become quickly identifiable by consumers looking to purchase quality cars from a trusted source. Add to that 15 years of information empowerment (courtesy of the internet) and consumers are more demanding and less willing to accept anything ‘As Is.’

CPO is what consumers have come to expect and demand—and CPO makes it much easier for dealers to sell and get value for the vehicles on their lots. Plus, the benefits to dealerships of not having to sell ‘As Is’ are myriad, including the security and confidence that the sale is a sure sale, as well as faster inventory turns, higher gross profits, and happier customers.

So, why hasn’t ‘As Is’ gone the way of the Edsel?

Robust used vehicle certification programs have been mostly out of reach for off-brand vehicles at franchised dealerships and for almost all vehicles on the independent dealership lot. The numbers tell the story: of the 30-plus million used vehicles sold last year, fewer than two million were eligible for existing OEM-sponsored programs. This represents a huge certification gap that today’s consumer demands to be filled.

The fact is that as a tough economy has driven more car buyers to look for affordable pre-owned vehicles online and on the lot, the demand for broader certification has increased and the tolerance for anything ‘As Is’ has decreased.

Consumers today are less concerned about vehicle age, as evidenced by the fact that the average age of a vehicle on the road today is 10.8 years.* CPO programs that only cover vehicles under five or six years of age leave a broad swath of consumers, who are willing to drive an older vehicle but are not willing to settle for ‘As Is’, out in the cold when it comes to certification.

Data shows that consumers are far more likely to buy a vehicle if it is certified, and to pay more as well. That means a certification program covering the vehicles that the majority of used car shoppers are looking to buy is poised to be a key metal mover in the year ahead. Add to that the potential to increase revenue, because certified vehicles are valued higher, as well as increased turn, because consumer confidence is greater, and the need for a program that brings more vehicles into certification is of critical importance to today’s used car dealers, both franchised and independent.

The solution appears to be independent CPO brand and marketing programs that offer participating dealers benefits far beyond a backroom F&I insurance program that just sells a limited warranty or service contract. The time has come to fundamentally change the parameters and orientation of CPO programs by broadening the certification range to reflect the realities of today’s consumer and market (including the fact that “built to last” is no longer just a slogan: today’s vehicles are indeed built to last…into decades) certifying vehicles up to 150K and 15 years old is completely within reason.



When considering an independent CPO program, look for one that has an integrated marketing approach designed to turn inventory faster, achieve greater gross profit, and differentiate your dealership from the competition. Many dealers face brand challenges from the marketing and brand building opportunities widely available to bigger retail stores. Additionally, these dealers have limited access to scalable inspection solutions and back-end product sales. A CPO program must include online marketing and syndication, extended service contracts, independent inspections and a turnkey, web-based platform to help them compete effectively and cost efficiently for used car buyers.

In an ‘As Is is No More’ world, dealers don’t need just another insurance product or an ‘As Is’ CPO program. They need a robust CPO solution that gets them firmly and easily into the CPO marketing game.

Jeffrey Schwartz is president and CEO of Mota Motors. To stay current on the CPO industry, email Jeffrey Schwartz at jschwartz@dealermark.com or go to www.jeffreyschwartz.com.
* http://www.mediapost.com/publications/article/138518/jd-power-used-car-buyers-head-for-the-web.html#ixzz1kP2qWDEX

Jeffrey Schwartz

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