ProGuard Warranty has launched a Certified Pre-Owned (CPO) program to better position independent and franchise dealers for the current automotive retail environment. ProGuard’s CPO program helps dealers improve profit margins and inventory turns by providing higher quality vehicles backed by a 125-point certification process for buyer’s peace of mind.
Prior to COVID-19, CPO had been one of the strongest performing segments in the automobile retail market. That changed during the initial quarantine period when shoppers were unable to purchase cars on-site, resulting in a drastic decline in auto sales. At the same time, the forced closures of auto plants created a lack of new car inventory, further reducing revenue. “Rather than sit on unsold units, dealers released a significant amount of CPO-eligible inventory into the non-CPO used-vehicle market to move vehicles off the lot and recoup inventory costs,” said Dominic Limongelli, president of ProGuard Warranty. As the year progressed, auto sales recovered, and 2020 CPO sales ended up only slightly underperforming expectations.
Forecasts predict new car production levels to normalize by the third quarter of 2021, but it will take time for automakers to get vehicles into the hands of dealers. Customers wanting a new vehicle will find this low inventory frustrating, leading more buyers to the pre-owned market. “We’ve been in the automotive business for over 70 years, and while this is our first pandemic, we know that people will always need vehicles. Buyers have come back to dealerships but the marketplace itself has changed and dealers need to adapt to survive,” said Limongelli.
“This virus has affected every aspect of our lives, which is clearly evident in the retail automotive market,” stated Jan Klaiss, vice president of analytics for ProGuard. “Shoppers are no longer coming in looking for a cheap commuter vehicle, or a car for their kid to drive to college. Instead of spending money on destination vacations, they’re putting that money into their homes and vehicles, things that bring comfort daily. Underneath all this exists a layer of financial uncertainty, with buyers being wary of locking themselves into a lease or over-extending themselves on a loan.”
ProGuard recognized this as an opportunity to help their dealer partners succeed by offering a program focused on the best of the best certified vehicles to meet the needs of today’s buyers. “CPO vehicles allow shoppers to upgrade to a nicer ‘new-ish’ purchase without taking the depreciation hit. These vehicles are ideal for customers who want the additional features and peace of mind that comes with a new vehicle but aren’t willing to pay full price for these luxuries. Since we’re all putting less mileage on our vehicles, buyers are willing to pay more for a vehicle that they will hold onto longer,” offered Limongelli.
“We think CPO is the way for dealers to set themselves apart right now by capturing the higher price point segment of the used car market,” said Tyler Todd, sales manager of ProGuard Warranty. “Greater demand for lower mile, late model vehicles is forcing dealers to pay a higher cost per unit, so they are looking for ways to make back that expense. By offering certified vehicles, dealers can increase profitability on every unit and pick up the maintenance business, further solidifying the relationship.”
Dealers perceive CPO programs to be difficult and costly, which is based on their experience with factory programs. ProGuard took this into account in developing their CPO program, simplifying the process and providing customer-friendly sales tools to promote the vehicles. Chris Zamboni, general manager of William L. Aurandt Auto Sales in Johnstown, PA, was looking for a competitive edge and has been pleasantly surprised with what ProGuard’s CPO program has done for his business. “With so much of the sales process being done online now, we need to provide every reason possible for a shopper to choose our vehicle over someone else’s. The ProGuard multi-point certification process is a great selling point that helps close deals and turn inventory much faster.”
ProGuard’s Certified Pre-Owned program offers many advantages for the independent and franchise dealer. “Unlike manufacturer’s programs where factory CPO vehicles can only be sold by a franchise used-car dealer for that brand, our dealers can select their own inventory. They are not limited to a specific make and model so they can cherry pick the vehicles best suited to their customer base,” stated Limongelli. ProGuard dealer partners are given the option of choosing a length of contract that meets their budget and can earn back the cost of certification plus more through upsells. In addition, all CPO contracts are eligible for incentives and points earned on every contract sold can be redeemed for operational, sales and marketing tools through the ProGuard Miles® program.
All of this is backed by the exceptional support of ProGuard, which is more important than ever when it comes to certified vehicles. Technicians are trained to perform the certification process and provide customers verification as to the quality of the product as part of the sale. ProGuard Certified vehicles come with an extensive vehicle protection plan that covers advanced electrical, air conditioning, sensors, and suspension components – ensuring customers will not be hit with expensive repairs down the road. “Our certification is only as good as our reputation, so we are very selective about the dealers we accept into our program,” Limongelli said. “If there is one takeaway from this past year, it’s the importance of keeping family and friends safe and that’s what we work to do every day.”
For more information, visit proguardwarranty.com.
