ORADELL, N.J. – With fuel prices reaching all-time highs, American consumers are keen on stretching budgets, especially on large-ticket items like automobiles.
According to a recent study by research and consulting firm TechnoMetrica Market Intelligence, certified pre-owned vehicles are definitely an option.
About one out of 12 households have purchased a CPO within the past 12 months and a significant number (28 percent) have purchased one sometime in the past, says TechnoMetrica. Comparing study results from 2004 and 2006 shows stable trends.
"CPOs have a natural appeal to consumers who are feeling the pinch of high gasoline prices and see the specter of rising interest rates on the horizon," says Raghavan Mayur, president of AutoView, TechnoMetrica's automotive division.
When consumers were asked about the main reasons behind their decisions to purchase a CPO, nearly three-quarters indicated cost (43 percent), affordability (21 percent), or a good deal (9 percent).
"But good deals can only go so far," says Mayur. "Consumers need some guidance before automakers can make the sale."
It's easier to make the sale when the consumer has some prior knowledge (43 percent) about CPOs, says Mayur, and having knowledgeable salespeople at the dealerships (29 percent) is also a big plus.
The study also revealed that the most successful CPO brands, in terms of sales over the past 12 months, include Chevrolet (18 percent), Ford (18 percent), Dodge (9 percent), and Honda (5 percent).
According to Mayur, good word-of-mouth, excellent buyer satisfaction levels and relatively affordable prices should help stimulate CPO sales.
"The youth market is particularly interested in such vehicles," he says, "and with their penchant for online research, networking and limited budgets, automakers would be remiss if they didn't make a strong effort to court this important consumer group."