Acquiring enough vehicles to meet demand is top of mind for CPO leaders at various OEMs. 

“Inventory will be a challenge until 2025,” said Tom Love, certified used-vehicle program manager for Hyundai.

“Our main focus for this year will be certified inventory,” stated Lexus certified manager Rick Williams in a written response to Auto Remarketing.

“These days the focus is on obviously acquiring vehicles,” said Ron Cooney, Toyota certified used vehicle sales operations manager.

However, acquiring the vehicles that fit certified requirements along with vehicles that fit consumers’ budget is of top importance, those and other leaders say.

The OEMs are also working to provide a strong digital presence to help their CPO dealers, and several are expanding the tiers of their programs to increase eligibility.

Supply still top of mind

Scott Hagen, head of certified pre-owned vehicles for Stellantis, said sourcing inventory was a top-of-mind issue for the company.

But not just any inventory.

It should be inventory that meets the qualifications of the certified program.

“[For] any certified program, reputation is a huge selling point,” Hagen said. “You don’t want to compromise that by trying to bring in inventory that might not qualify.” 

Dealers are working harder to gain inventory that can be certified, said Love of Hyundai. Lease rates have been down the past few years. Lease returns have traditionally fueled certified used-vehicle inventory, he said. 

“Dealers are making a real earnest effort that if the vehicle can be certified and it meets the requirements, then it is being sold as a certified car, because they’re starting to see the true value in offering that car to the customer,” Love said.

Despite supply constraints, industry on the rise

CPO vehicle sales saw a rebound in November and December of last year and January of this year compared to those months in the previous years, Love said. 

And Hyundai has seen CPO sales increase at a greater percentage than the overall industry, he said. Hyundai CPO-vehicle sales were up 57.4% in November 2022 compared to November 2021. CPO sales for the automaker were up 106.3% in December 2022 compared to December 2021, and in January of this year, Hyundai’s CPO sales were up 90.7% compared to January 2022.

Automakers, dealers working together

To what would Love attribute those jumps in used-vehicle sales?  

Strong dealer engagement, he said.

With tight new-car inventory, dealers are looking for alternative programs for people to purchase vehicles.

“This is the almost-new car,” Love said. “So, your lease is ending or you need to add a car to your stable, new-car inventory is a little tight, but this car is relatively new, it has all the technology and it comes with the warranty. And that kind of fits the bill for most people [who] are looking to buy an additional car.”
Love continued, “The success of the company, success of our program, obviously is dependent upon our dealers being successful.”

Arming dealers with CPO marketing tools

Automakers are working with dealers to get the message out to the public about their CPO programs. 

“We really think communication is key with our dealers, and [we’re] really trying to arm them with tools to get that message out there,” said Dan Rodriguez, manager, auto remarketing, for American Honda.

He mentioned Honda’s “heavy digital presence” in the market, and that the company creates assets for dealers to complement their messaging. The company provides dealers with an annual calendar showing when the company sees that the greatest amount of off-lease vehicles is coming and the type of support the company plans to offer them throughout the year, such as additional marketing and advertising or lease incentive support. 

As for Hyundai, its CPO advertising is 100% digital, Love said.

“No television commercials, although we have been exploring some streaming audio,” he said.

Williams of Lexus said in a written response, “Almost all of our marketing is done through digital advertising.” 

Part of Toyota’s CPO marketing has focused on convincing consumers to go to a Toyota dealership to buy their used Toyota.

That is a smart move for consumers, Love said, “because you can buy something called a certified used Toyota.” 

He continued, “They’ve already made up their mind that they want to used Toyota, so my job has been trying to get them to go to the Toyota dealer to get it, not just to convince them to buy a Toyota.” 

Expansion of tiers

Several automakers are adding more tiers to their CPO programs to expand eligibility. 

Honda and Acura in March of last year unveiled The HondaTrue Used and Acura Precision Used programs, which offer certified Honda and Acura certified pre-owned vehicles up to 10 years old. 

Rodriguez explained that Honda now offers three CPO tiers: HondaTrue Certified+, HondaTrue Certified, and now HondaTrue Used. The Acura programs are Acura Precision Certified and now Acura Precision Used. 

The news release announcing the Honda program said it “creates even more opportunity for young, first-time buyers” to experience the Honda brand through used vehicles with the “peace of mind of a Honda-backed limited warranty.” The release on the Acura program describes it as an opportunity for those buyers to purchase premium vehicles with an Acura-backed limited warranty.

“And then as those cars came in and got ready for retail, we’re having them go through that inspection process so that we’re bringing them up to a certain standard, and then offering even those customers the extra peace of mind of having some sort of warranty with those vehicles, even … the 6- to 10-year-old ones where they could kind of have that peace of mind and a warranty that’s backed by a manufacturer,” Rodriguez said.

Cooney of Toyota said Toyota has not launched such a new tier program yet, but he said “a substantial warranty and some of the traditional amenities that you get with the Toyota Certified will be included in a second-tier program that will include older used Toyotas that are a higher mileage range. There will be reconditioning requirements and basic eligibility requirements.”

Stellantis in October unveiled CPO Go, which extended the offering for its certified pre-owned program in North America. Through the program, customers can purchase a certified Chrysler, Dodge, Jeep, Ram or FIAT vehicle that is six to 10 model years old and/or vehicles between 75,001 and 120,000 miles.

Hyundai also expanded eligibility for its program, adding another model year, and adding vehicles with between 60,000 and 80,000 miles to its eligibility standards.

“We are also exploring certification of non-branded vehicles,” Love said.

He went on to say, “I think it’s a positive part of the certified program for the industry to do stuff like this.”