Thought Leadership Series
Too Many Used Cars? Go CPO.
Monday August 8, 2016
Article Highlights
- Incentivized CPO leasing gets consumers into your brand and helps keep them there, but OEM-incentivized new car leases drive consumers away from CPO leases without incentives.
- Dealer benefits of incentivized CPO leasing: shorter customer lifecycle, higher customer loyalty and retention and increased off-lease volume / more profitable used-car sales
- Consumer benefits of incentivized CPO leasing: lower (more desired) monthly payment, consumer does not bear brunt of market depreciation and no residual value risk
Around 3.1 million off-lease vehicles will be coming back in 2016, up 20% from 2015. Manheim forecasts those numbers will continue to grow in 2017 and 2018.1 If they all go back to the auctions, supply could exceed demand, resulting in significantly lower used car prices, which may affect residual values. What can dealers do to mitigate against this potentially difficult environment?
Cox Automotive analysis shows that CPO leasing can create brand loyalty because it provides car shoppers another option when getting into the market. Learn more in this download.
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1Automotive News, April 16, 2016
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