Certified pre-owned vehicles are a 'necessary evil' for automakers - Business Insider

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The auto industry's love for leases created the 'certified pre-owned car' — and now the popular option is eating into new vehicle sales

Certified pre-owned car sales hit a record 2.8 million vehicles in 2019, nearly double the volume at the beginning of the decade.Certified pre-owned vehicle sales hit a record 2.8 million vehicles in 2019, nearly double the volume at the beginning of the decade.

CPO sales hit a record 2.8 million vehicles in 2019, nearly double the volume at the beginning of the decade, according to Cox Automotive, one of the country's largest auto auction and tracking services. Prior to the coronavirus pandemic, which has slammed overall US car sales, Cox analysts saw the certified market on track to set another all-time high in 2020.

While CPO sales may dip along with the rest of the auto market this year, such vehicles could yet capture another record share, according to industry analysts such as George Augustatis, director of economic and industry analysis at auto sales website CarGurus. While CPO programs might be the exclusive purview of franchised dealers, they offer little financial benefit to automakers. So, why would these companies tolerate — never mind promote — something that could cut into new vehicle sales?

 

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