Study Finds CPO Buyers Make Quicker Decisions, Remain Unimpressed with Purchase Experience

Certified pre-owned (CPO) sales are important especially in the current market as new-vehicle sales continue to moderately decline. Market trends such as rising interest rates, credit tightening, and talks about tariffs have put affordability front and center. As a result, consumers who may have purchased a new vehicle previously are now pushed into the used-vehicle market, and CPO offers them a compelling value proposition.

Last year CPO sales grew by 2% over 2017 – making 2018 the eighth consecutive year of growth in CPO. And we anticipate 2019 will be another record year. CPO sales in April increased 6% year over year. Total CPO sales for 2019 are already up 2% year to date.CPO sales are being driven by more than 4 million leases reaching maturity this year, providing the market ample supply to fuel additional growth.

In the 2019 Car Buyer Journey Study, Cox Automotive surveyed over 3,000 consumers – of which 331 purchased a CPO vehicle within the last 12 months and had used the internet at some point during that process. A few trends emerged through our analysis of CPO buyers.

1. CPO Buyers In Market Fewer Days Than Other Buyers

According to the 2019 Car Buyer Journey Study, the average CPO buyer spends fewer days in market than both a new-vehicle buyer (-10 days) or a used-vehicle buyer (-8 days). The average CPO buyer spends 85 days in market – trimming approximately a month and a half off their process since 2017. In fact, half of CPO buyers buy in 30 days or less, the same as other used-vehicle buyers.

Not only are the days in market declining, but also the time spent doing vehicle shopping activities has dropped. CPO buyers still spend more time researching their purchase than other types of shoppers – with an average of 14 hours and 23 minutes, but they are spending an hour and a half less than they spent shopping in 2017.

2. Shopping Experience Remains Frustrating

When asked about their most recent shopping experience, 67% CPO buyers said their experience was the same as last time or worse. CPO buyers are significantly less likely than those who purchase non-certified used vehicles to say the experience has gotten better.

One thing is for sure – time spent at the dealership – 3 hours on average – remains a point of frustration among all buyers including CPO buyers. The length of time buyers spend at the dealership continues to be rated the lowest in satisfaction, with only 32% of CPO buyers saying they are satisfied with how long the process took, and that’s 6% drop from 2017.

Our research continues to tell us that 90 minutes is the sweet spot before buyer satisfaction starts to drop off. In this recent study, we found CPO buyers spent 49% of their time – or 90 minutes – negotiating and signing paperwork. However, negotiating and signing paperwork have been the top consumer frustrations with the purchase process since we started asking about dealership experience over 4 years ago.

3. Digital Retailing Option Gives CPO Buyers What They Want

So, where specifically in the purchase process should dealers focus their efforts to improve the customer experience? CPO buyers want to spend more time test driving vehicles and setting up the vehicle after purchase. They want to spend less time talking with salespeople and especially want to shorten the amount of time they spend negotiating and signing paperwork. We see in our research repeatedly that dealers who offer a digital retailing option so that buyers can complete purchasing activities online instead of at the dealership in-person tend to achieve higher satisfaction with the dealership experience.