If you're new to the world of certified pre-owned car-shopping, you might be wondering why you're hearing so much about these cars now. Also, you might ask, where do all these "gently used" pre-owned cars come from? Who is shopping for them? Thanks to its data and analysts, Edmunds has answers for you.
Who Shops for Certified Pre-Owned Cars?
Deep Researchers Who Will Spend More for 'Gently Used' Cars
These cars have been marketed to shoppers since the early 1990s, but their sales have skyrocketed in the last five years. Certified pre-owned (CPO) vehicles accounted for 22 percent of franchise dealerships' used-car sales in the U.S. in 2015, according to Edmunds research. That was a record-high level for CPO sales and 2016 should be no different.
The answer to where the cars come from boils down to one word: leases. From 2012 to 2013, new vehicle leases spiked 27 percent. That was the largest ever year-over-year increase for leasing. These leases are steadily approaching their maturity date, and as people turn them in at dealerships, the cars will feed the fleet of possible CPO vehicles. That should push CPO's share of franchise used sales closer to the 25 percent mark.
So who is shopping for all these CPO cars? You might think that CPO shoppers are a subset of used-car buyers, but Edmunds data tells a different story. The profile for CPO shoppers on Edmunds has far more in common with new-vehicle shoppers than it does with used-car shoppers. It's not that surprising when you start to examine the elements of a CPO sale:
CPO cars have higher prices. Because they are newer, reconditioned and have low mileage, they cost on average about $1,500 more than a traditional used car.
CPO cars come with warranties. Just as new cars do.
The buying experience is more like new-car shopping. CPO car sellers emphasize the excellent condition of the vehicles and the warranties. That more resembles new-car selling than used-car transactions, where both buyers and sellers are accustomed to some vehicle wear and tear and where warranties aren't always included.
Here some other Edmunds facts about CPO shoppers:
CPO shoppers on the Edmunds site tend to be older than used-car shoppers, though they're just about the same age as new-car shoppers.
At 38 percent, the CPO shopping group has the highest share of women, slightly higher than new-car shoppers. Meanwhile, women represent only about 27 percent of used-car shoppers on Edmunds.
CPO shoppers are an information-hungry bunch, spending more time researching than either new-car or used-car shoppers. They view twice as many web pages per research session and their sessions are nearly twice as long as those of new- or used-car shoppers.
CPO shoppers also are hunkering down with bigger screens as they shop: They do more of their research on desktop or laptop computers than on mobile phones or tablets.
If you're ready to join the CPO shopping brigade, Edmunds is here to help. Check out our articles for shoppers and start looking at CPO vehicles offered by our dealer partners. If you ever have questions about CPO car shopping, just get in touch with our Live Help team. They can answer all your questions and help you find the CPO car that's right for you.