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Certified Pre-Owned UNDERSTANDING THE CUSTOMER · New-Car Shoppers Pre Post 55 % 69 % Used-Car...
Transcript of Certified Pre-Owned UNDERSTANDING THE CUSTOMER · New-Car Shoppers Pre Post 55 % 69 % Used-Car...
UNDERSTANDING THE CUSTOMER
November 2013
Certified Pre-Owned
About the CPO Study
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PURPOSE:
To trend shopper familiarity, opinion, and consideration of CPO vehicles.
METHODOLOGY:
A quantitative online survey was conducted in September 2013. To qualify,
respondents must have been planning to purchase a vehicle in the next 6 months.
A total of 862 interviews were completed:
• Primary New vehicle considerers: 298 interviews
• Primary Used (non-certified) vehicle considerers: 264 interviews
• Primary CPO vehicle considerers: 296 interviews
Weights were applied to Male/Female for New & Used vehicle considerers.
Source: 2013 Certified Pre-Owned Research. Morpace.
THINGS YOU SHOULD KNOW
November 2013
Half a dozen
CPO is a good lower cost alternative
for those who cannot afford a new vehicle.
4
1
CPO is important now more than ever.
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“Manufacturers are working with their dealers
to offer certified pre-owned programs where
buyers can stretch their budget by
purchasing a two- or three-year-old vehicle that
has gone through an extensive inspection and,
if necessary, repairs and replacements. Such
vehicles may cost slightly more than a
conventional used model but usually include a
like-new warranty.”
New-vehicle shoppers are now more open to considering a used vehicle, especially CPO.
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Consider
Used
2012
2013
26%
33%
Consider
CPO
2012
2013
43%
55%
S2. Thinking about your next vehicle, how likely are you to consider…?
Source: 2013 Certified Pre-Owned Research. Morpace.
Their CPO consideration is even approaching levels seen for Used Shoppers.
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CPO Consideration
New-Car Shoppers
2012
2013
43%
55%
Used-Car Shoppers
2012
2013
61%
60%
S2. Thinking about your next vehicle, how likely are you to consider…?
Source: 2013 Certified Pre-Owned Research. Morpace.
New-vehicle shoppers’ familiarity with specific aspects of CPO has dropped.
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New-Car Shoppers
2012
2013
73%
65%
Used-Car Shoppers
2012
2013
67%
68%
CPO “Fully Inspected”
HOWEVER …
A3a. Which of the following best define the concept of Certified Pre-Owned (CPO) vehicles? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
New-vehicle shoppers’ familiarity with specific aspects of CPO has dropped.
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New-Car Shoppers
2012
2013
68%
55%
Used-Car Shoppers
2012
2013
52%
54%
CPO “Warranty”
HOWEVER …
A3a. Which of the following best define the concept of Certified Pre-Owned (CPO) vehicles? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
Once CPO was explained, shoppers’ willingness to consider CPO increased.
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New-Car Shoppers
Pre
Post
55%
69%
Used-Car Shoppers
Pre
Post
60%
66%
CPO Consideration
S2. Thinking about your next vehicle, how likely are you to consider…?
C1. Now that you have seen the definition of CPO vehicles, how likely would you be to consider a CPO vehicle for your next vehicle purchase?
Source: 2013 Certified Pre-Owned Research. Morpace.
Reasons for CPO consideration haven’t shifted much.
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CPO Shoppers
67%
48%
37%
33%
32%
31%
20%
Peace of mind
Warranty
Can’t afford a new vehicle
Can afford a new vehicle, but don’t
want to pay that much
Economy (new vehicle no longer an option)
Less immediate depreciation
Can’t secure financing for
a new vehicle
R1. Why would you consider purchasing a CPO vehicle? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
The premium remains the barrier to converting
many used-vehicle shoppers.
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2
Used-vehicle shoppers remain highly open to considering CPO.
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Consider
New
2012
2013
33%
33%
Consider CPO
2012
2013
61%
60%
S2. Thinking about your next vehicle, how likely are you to consider…?
Source: 2013 Certified Pre-Owned Research. Morpace.
Used shoppers willing to pay a CPO premium has dropped.
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New-Car Shoppers
2011
2013
67%
62%
Used-Car Shoppers
2011
2013
51%
34%
HOWEVER …
P1. Would you be willing to pay more for a Certified Pre-Owned (CPO) vehicle compared to a used Non-Certified vehicle?
Source: 2013 Certified Pre-Owned Research. Morpace.
Affordability is the main barrier for Used-Car shoppers to pay the premium.
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47%
22%
10%
Can’t afford it
Budgeted a certain amount
Inspection is not worth it
P5. You indicated that you are not willing to pay more for a CPO vehicle. Why?
Source: 2013 Certified Pre-Owned Research. Morpace.
Those who are willing to pay a premium find
the warranty and inspection most important.
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3
The acceptable premium for CPO more than doubled among all shoppers.
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New-Car Shoppers
2011
2013
$1,245
$2,940
Used-Car Shoppers
2011
2013
CPO Shoppers
2011
2013
$1,292
$2,163
$1,670
$2,434
P2. How much extra would you be willing to pay for Certified Pre-Owned (CPO) vehicle?
Source: 2013 Certified Pre-Owned Research. Morpace.
Warranty and inspection are the top reasons why shoppers pay a premium for CPO.
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P3A. You indicated that you would be willing to pay more for a Certified Pre-Owned (CPO) vehicle. Why are you willing to pay more for a CPO vehicle?
Source: 2013 Certified Pre-Owned Research. Morpace.
New Shopper Used Shopper CPO Shopper
Warranty 60% 60% 65%
Inspected/certified 58% 66% 69%
Reliable/dependable 40% 51% 46%
Low mileage 36% 32% 43%
Good price/value 26% 20% 22%
Better quality 26% 19% 17%
Safety 24% 30% 18%
New Shopper Used Shopper CPO Shopper
Warranty 60% 60% 65%
Inspected/certified 58% 66% 69%
New Shoppers Used Shoppers CPO Shoppers
Manufacturer Powertrain Warranty 16% 18% 16%
Comprehensive Limited Warranty 15% 16% 16%
Detailed Inspection 14% 15% 16%
Transferrable Warranty 9% 7% 8%
Buyback Guarantee 9% 11% 11%
Vehicle History Report 9% 7% 8%
Emergency Roadside Assistance 7% 7% 8%
Towing Coverage 7% 6% 6%
Rental Car Assistance 7% 7% 6%
Trip Interruption Benefits 6% 6% 6%
New Shoppers Used Shoppers CPO Shoppers
Manufacturer Powertrain Warranty 16% 18% 16%
Comprehensive Limited Warranty 15% 16% 16%
Detailed Inspection 14% 15% 16%
As a result, the warranties and inspection are the most valuable aspects of a CPO program.
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P3B. What percentage of (the amount of $ willing to pay extra for a CPO vehicle) would you allocate for the following benefits?
Source: 2013 Certified Pre-Owned Research. Morpace.
Share of Premium (Mean Percent)
New Shoppers Used Shoppers CPO Shoppers
Manufacturer Powertrain Warranty 40% 31% 40%
Comprehensive Limited Warranty 40% 32% 42%
Detailed Inspection 45% 41% 45%
They are also the top reasons why shoppers would walk away from a CPO vehicle.
Must-Haves for Consideration
P3C. Which benefits would you say are so important that you would not Consider a CPO vehicle that did not offer them?
Source: 2013 Certified Pre-Owned Research. Morpace. 20
Most shoppers believe
the dealership certifies vehicles.
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4
Only 1-in-3 shoppers are aware that the OEM is involved in certifying the vehicles.
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New-Car Shoppers
OEM
Dealer
Used-Car Shoppers
OEM
Dealer
CPO Shoppers
OEM
Dealer
37%
66%
35%
70%
41%
72%
A3a. Which of the following best define the concept of Certified Pre-Owned (CPO) vehicles? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
Manufacturer certifications are viewed as the most reliable – but only by a slim margin.
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New Shopper CPO Shopper Used Shopper
Manufacturer 89% 92% 88%
Dealership 81% 83% 78%
Own mechanic 77% 77% 73%
Independent agency 74% 76% 69%
*Top 2 Box: Very/Somewhat Reliable
R3A. How reliable would you feel the certification would be if performed by ... ?
Source: 2013 Certified Pre-Owned Research. Morpace.
New Shopper CPO Shopper Used Shopper
Manufacturer 89% 92% 88%
O CP
These brands have been most successful at creating awareness for CPO among all shoppers.
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A8. To your knowledge, which manufacturer(s) certify their used vehicles?
Source: 2013 Certified Pre-Owned Research. Morpace.
Brands that offer CPO programs — New-car shopper awareness.
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24% 24% 26%
28% 28% 29%
36% 37% 37% 39%
41%
0%
10%
20%
30%
40%
50%
A8. To your knowledge, which manufacturer(s) certify their used vehicles?
Source: 2013 Certified Pre-Owned Research. Morpace.
Brands that offer CPO programs — Used-car shopper awareness.
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18% 19% 20% 22%
24% 26% 27% 27%
31% 33%
0%
10%
20%
30%
40%
50%
Used shoppers are less likely to be
aware of luxury brand CPO programs.
A8. To your knowledge, which manufacturer(s) certify their used vehicles?
Source: 2013 Certified Pre-Owned Research. Morpace.
Brands that offer CPO programs — CPO shopper awareness.
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20% 21%
25% 25% 26% 29%
31%
36%
40% 42% 42%
0%
10%
20%
30%
40%
50%
A8. To your knowledge, which manufacturer(s) certify their used vehicles?
Source: 2013 Certified Pre-Owned Research. Morpace.
CPO buyers research longer, and the Internet
is their number one source for information.
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5
Before making a purchase, CPO buyers spend more time researching than the average shopper.
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Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
Average Shopper
2011
2013
17h 30m
14h 48m
CPO Shopper
2011
2013
17h 6m
16h 6m
The Internet is the top source used to research their next vehicle purchase.
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5% 8% 6%
17% 13% 14%
33%
75%
9% 12% 10%
26%
14% 20%
35%
71%
RadioOutdoorAds
DirectMail
NewspaperMagazineTelevisionReferralInternet
2011 2013
Sources Used to Shop (Online & Offline Buyers)
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
Significantly higher / lower than 2011
Time spent online by CPO buyers is growing.
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2013 2011
17h 6m total
11 hrs 6m 16h 6m total
12 hrs 24m
Online
63%
Online
77%
online online
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
Significantly higher / lower than 2011
Third-party sites continue to be their top online resource – reaching 8-in-10 CPO buyers.
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49% 46%
65%
51%
42%
36%
81%
70%
20132011
Online Sources Used to Shop (Online Buyers)
Third-Party Site
OEM Site
Dealer Site
Search Site
Significantly higher / lower than 2011
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
In addition, they are more likely to use third-party and dealer sites than the average shopper.
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76%
59%
49%
42%
81%
65%
49%
42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Third-Party Sites Dealer Sites Search Sites OEM Sites
ALL
CPO
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
The Internet is the most influential source, with half citing it as what led to their vehicle purchase.
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0%
1%
1%
2%
2%
2%
19%
46%
Radio
OutdoorAds
Magazine
DirectMail
Newspaper
Television
Referral
Internet
Source that Led to Purchase (Online & Offline Buyers)
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
1-in-5 CPO buyers use either a smartphone or tablet to vehicle shop.
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Devices Used to Shop (Online Buyers)
55% 48% 17% 18%
Base: CPO Buyer
Source: 2013 Polk Car Buyer Study
CPO programs help build long-term
relationships with car owners.
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6
CPO owners are more loyal to their dealership.
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current CPO owners 60%
never owned CPO 47%
vs.
O8. How likely are you to shop for the [S4a MAKE/MODEL] from the dealership where your [CO3 MAKE/MODEL] was purchased?
Source: 2013 Certified Pre-Owned Research. Morpace.
CPO owners are more likely to express service loyalty.
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current CPO owners 70%
never owned CPO 61%
vs.
O6. How likely are you to visit the dealership where your purchase or lease your next vehicle for car service or repairs?
Source: 2013 Certified Pre-Owned Research. Morpace.
And …
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the same brand. 92% are likely to buy
are shopping for another
CPO vehicle.
45% of CPO owners
O4c. How likely are you to purchase another CPO [BRAND] vehicle?
Source: 2013 Certified Pre-Owned Research. Morpace.
All of which is important for when…
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are shopping for a
new vehicle.
55% of CPO defectors
S3. Thinking about your next vehicle, what are you most likely to consider…?
Source: 2013 Certified Pre-Owned Research. Morpace.
CPO can be a good entry point
into the brand for Millennials.
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7
Millennials have a higher likelihood to consider CPO than older shoppers.
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New Shoppers
Millennials
35+ Years Old
79%
42%
Used Shoppers
Millennials
35+ Years Old
65%
55%
S2. Thinking about your next vehicle, how likely are you to consider…?
Source: 2013 Certified Pre-Owned Research. Morpace.
Millennials are not as familiar with specific aspects of CPO.
43
New Shoppers
Millennials
35+ Years Old
56%
70%
Used Shoppers
Millennials
35+ Years Old
64%
73%
CPO “Fully Inspected”
A3a. Which of the following best define the concept of Certified Pre-Owned (CPO) vehicles? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
Millennials are not as familiar with specific aspects of CPO.
44
New Shoppers
Millennials
35+ Years Old
48%
59%
Used Shoppers
Millennials
35+ Years Old
51%
59%
CPO “Warranty”
A3a. Which of the following best define the concept of Certified Pre-Owned (CPO) vehicles? Please select all that apply.
Source: 2013 Certified Pre-Owned Research. Morpace.
Once CPO was explained, Millennials’ willingness to consider CPO increased.
45
New Shoppers
Pre
Post
79%
86%
Used Shoppers
Pre
Post
65%
73%
CPO Consideration
S2. Thinking about your next vehicle, how likely are you to consider…?
C1. Now that you have seen the definition of CPO vehicles, how likely would you be to consider a CPO vehicle for your next vehicle purchase?
Source: 2013 Certified Pre-Owned Research. Morpace.
Millennials are even more willing to pay a premium for CPO.
46
New Shoppers
Millennials
35+ Years Old
74%
55%
Used Shoppers
Millennials
35+ Years Old
37%
30%
P1. Would you be willing to pay more for a Certified Pre-Owned (CPO) vehicle compared to a used Non-Certified vehicle?
Source: 2013 Certified Pre-Owned Research. Morpace.
Millennial shoppers are the most likely to learn about CPO on the internet.
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A2. Where did you first learn about Certified Pre-Owned (CPO) vehicles?
Source: 2013 Certified Pre-Owned Research. Morpace.
32%
21% 22% 21%
9%
27%
11%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Internet TV Friends & Family Dealership
Millennial
35+ years old
CPO Shopper
Half A Dozen Things You Should Know
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1. CPO is a good lower cost alternative for those who cannot afford a new vehicle.
2. The premium remains the barrier to converting many used-vehicle shoppers.
3. Those who are willing to pay a premium find the warranty and inspection most
important.
4. Most shoppers believe the dealership certifies vehicles.
5. CPO buyers research longer, and the Internet is their number one source for
information.
6. CPO programs help build long-term relationships with car owners.
7. CPO can be a good entry point into the brand for Millennials.
Source: 2013 Certified Pre-Owned Research. Morpace.
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UNDERSTANDING THE CUSTOMER
Certified Pre-Owned
For more information, please contact
your AutoTrader.com Sales Executive
or email [email protected].
Demographics
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New
Shoppers (A)
n=298
Used
Shoppers (B)
n=264
CPO
Shoppers (C)
n=296
% Male 55% BC 38% 38%
% College Grad 51% BC 29% 43% B
Mean Age 46 BC 39 42 B
Mean Income $72.9k BC $46k $55.6k B
% Married 55% B 37% 50% B