OEM and OMM Certified—What If You Could Certify ALL of Your Late-Model Pre-Owned Vehicles?

It’s a fact: Consumers who want the economy of “pre-owned” and the assurance of a vehicle with a warranty can have it all by choosing Certified Pre-Owned (CPO), and they’re happy to pay more for what they perceive to be a better value. As such, CPO represents a unique “win-win” opportunity for dealers and their customers.

Since the OEMs only provide CPO programs on their own franchised vehicles dealers were previously limited to certifying only those vehicles. The recent introduction of credible independent CPOs that certify the other makes and models (OMM) has dramatically increased the ability of dealers across the country to provide this extra value to consumers, and themselves.

Increased gross profit and ROI

According to Edmunds and other industry sources, customers are willing to pay an average of $1,300 and more for a certified vehicle. If the average cost of certification for either an OEM or OMM CPO is about $650-$800 (including the PDI cost difference to certify) there is a clear gross profit opportunity in certifying as many of the vehicles on your lot as possible.

Plus, industry averages indicate that a certified vehicle is sold faster than a non-certified vehicle, about 27 days for certified and 55 days for non-certified. This “velocity” advantage creates a significantly higher ROI on your investment in the vehicle.

Broader inventory options so you can focus on value, not just brand

With the current shortage of quality vehicles in the three to five- year range, it can be expensive to limit your pre-owned inventory to core, in-franchise vehicles. Having an OMM CPO program allows you to pay a little more for quality “other make” trade-ins and great auction values knowing you can certify the vehicle, offer more to your customer and make more money doing it.



Choosing the right OMM CPO for your dealership

There are a handful of solid complementary OMM CPO options available, ranging from easy-to-enroll-in programs that require vehicle inspection and a specific warranty package, like the POADA’s CarMark Certified (www.carmarkcertified.com), to more comprehensive programs. For example, Motor Trend magazine’s Motor Trend Certified Advantage (www.motortrendcertified.com) is available only to a limited number of dealers in any area, and requires that the vehicle be inspected, repaired and guaranteed to Motor Trend’s national standards and include a package of specific “consumer experience” benefits as part of the certification. Some programs offer full training and support for dealership personnel, co-op advertising, and more.

Which program is best for your dealership? Research is the key. The most important factors are that the OMM you choose have a national presence and a brand name that consumers will trust. The critical decision is to have an OMM program. Not having as many of your pre-owned vehicles certified as possible is not an option in today’s environment.

Larry Dorfman is CEO and chairman of APCO, the leading independent provider of automotive benefits specifically created to enhance a consumer’s vehicle buying and ownership experience in ways that create long-term positive bonds between the consumer and their dealership. Please visit www.easycare.com for more information.

Larry Dorfman

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