And chances are good that you don’t know exactly what that means.
But a recent survey by AutoTrader.com, an online marketplace for new, used and CPO vehicles from dealers and private sellers, suggests that the better shoppers understand what CPO is, the more likely they are to purchase a certified vehicle – by a significant margin.
“CPO still isn’t clearly understood, so dealers and manufacturers need to ensure that they are communicating clearly – early and often – about what CPO is so they can … build lifelong, happy customers,” said Michelle Krebs, senior analyst at AutoTrader.com.
The time couldn’t be better to learn about CPO with nine million such vehicles expected to hit the market in the next few years, according to AutoTrader and other industry experts.
Among the key findings of the AutoTrader study:
The more you know about certified pre-owned vehicles – that they have passed a detailed inspection provided by the manufacturer and typically come with a warranty – the more likely you are to consider purchasing a CPO vehicle, especially if you started out looking for a new vehicle.
“Most shoppers still believe that vehicle certification comes from the dealership,” AutoTrader reported. “However, their consideration increases when exposing them to a comprehensive definition of CPO.”
“Peace of mind” is the top reason shoppers buy certified vehicles over other used cars, trucks or SUVs, with affordability and manufacturers’ warranties also ranking high.
Most CPO owners are satisfied and loyal, with 77 percent likely to buy the same brand again and 85 percent likely to buy from the same dealership when they’re ready for another vehicle.
Most shoppers are willing to pay a premium for CPO vehicles over non-certified counterparts. Among new-car shoppers, 84 percent are willing to pay more, which is up 22 percentage points since 2013, while 51 percent of used-car shoppers are willing to pay a premium compared to 34 percent in 2013.
Millennials settle for CPO vehicles although they really want new cars, because their high aspirations for vehicles they purchase “are rarely matched by their financial situations.” Overall, millennials are less satisfied with a CPO purchase and more often see the “used” label as a disadvantage.
“CPO vehicles provide shoppers with a good value,” according to Krebs. “But the key to getting them to buy the vehicles is education.”