Analyzing the Factors Behind the Sluggish Performance and Identifying Strategies for Recovery

The Decline in CPO Sales During April

Following a solid start to the year, certified pre-owned (CPO) vehicle sales experienced a setback in April. According to data from Cox Automotive, CPO sales declined by 4.2 percent or 9,000 vehicles compared to April 2022. Additionally, April's estimated CPO sales of 214,684 reflected a 6 percent or 15,000 vehicle decrease from the previous month, March. However, it's worth noting that CPO sales for the first three months of the year saw a positive growth of 10 percent, equivalent to 59,000 units, compared to the same period in 2022.

Factors Contributing to the Sales Decline

High-interest rates exceeding 12 percent and low inventory, with less than a 45-day supply of used vehicles, played a role in the lagging CPO sales. Chris Frey, senior manager of Economic and Industry Insights at Cox Automotive, explained, "Higher interest rates and the looming concerns of a recession likely contributed to the CPO sales decline, with buyers pulling back from last month." While the strategy shift mentioned in the previous month's report, involving the inclusion of older units, is expected to yield positive results, the decline in sales from March to April suggests that sustained improvement from the larger pool of CPO-eligible teams may take a bit longer.

Introduction of NIADA's CPO 360 Program

To compete with franchise dealers' programs, NIADA launched the CPO 360 program in January. This initiative aims to help independent dealerships increase buyer confidence and enhance profitability. NIADA collaborated with top administrators in the industry, including AUL, GWC Warranty, ProGuard, and Southwest Dealer Services, to develop the program. Additionally, NIADA partnered with Carketa to streamline the inspection process by offering a comprehensive digital 200-point inspection.

Benefits and Coverage of the NIADA CPO Program

NIADA's Vice President, Jeremy Beck, highlighted the significance of the program, stating, "The independent world never had a true CPO program. This is a true CPO limited warranty program." By working with highly respected administrators known for their claims and customer service experience, NIADA provides a level of confidence for independent car shoppers, earning the respect of both dealers and customers. You may find more information on the program by visiting NIADA’s website here.