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Certified pre-owned program makes dealers money

By Wayne Hulit
CEO, Cedar Mountain RVI

“We see reconditioning as an investment, not as an expense.” – Norm Olson, former sales operations manager of Toyota Certified, in speaking about certified pre-owned programs.

Ten years ago, certified used vehicles occupied a small space on car and truck dealership lots. Today, certified cars and trucks are a distinct and important business line. Dealerships that have invested in certified pre-owned (CPO) programs have benefited from higher profit margins on used vehicle sales.

Following in line with this undeniable trend, certified inspections for RVs are here.

​In the company’s latest Used Vehicle Market Report, Edmunds.com analysts noted that in 2014 CPO sales hit an all-time high. Last year, CPO made up 20.8 percent of total used car sales at franchised dealerships, the highest percentage since certified pre-owned programs were introduced.

The report also noted that in 2014, the average one-year old vehicle sold 5.7 percent higher than in 2013.

“Car shoppers are finding a great selection to choose from, and, in the current economy, many are comfortable spending a bit more for that extra peace of mind that a CPO car brings,” explains Edmunds.com Senior Analyst Jessica Caldwell.

An independent third party RV dealer certified pre-owned program is the rising tide that floats all boats, and RV dealerships can now position themselves to ride the waves to higher profits while offering a superior product to customers.

  • General managers can offer more from their used RV inventory, and serve more buyers who are familiar with and comfortable buying CPO vehicles.
  • Sales managers will gain from increased sales value.
  • Service managers will benefit because their technicians will be able to concentrate on higher dollar repairs rather than inspections.
  • Finance and insurance managers will have an easier time finding sources of funding and insurance because the value of the RV has been determined by an independent source.

By participating in a certified pre-owned program, the dealership gets a positive infusion of profit to their bottom line.

Inspections performed by certified RV inspectors follow a code of ethics and standards set by an industry body. With car and truck CPO programs, there are no industry-level standards for inspection and reconditioning. However, car and truck CPO programs have standards that are dictated by the manufacturer.

Additionally, the manufacturer enforces the program by auditing the dealerships to make sure they are performing the reconditioning and CPO labeling according to those standards. While dealing with individual manufacturers can become cumbersome, the overall positive effect of a CPO program is that it increases value and reduces customer dissatisfaction.

In an industry report titled, “Guide to Certified Pre-Owned Vehicle Programs,” Patrick McFall, former VWoA’s certified pre-owned corporate sales manager, is quoted saying, “If you do the inspection the way you’re supposed to do it and the reconditioning the way you’re supposed to do it, generally there should be no claims in the first 30 days.”

So, how does a CPO program make you more money? Consider this:

  1. A CPO program is an investment, not an expense. It’s been proven by the car and truck industry that a CPO endorsement increases retail value of the product. If done right, it will reduce 30-day warranty return visits.
  2. Qualified by a third party inspector, a buyer knows that CPO RVs have been inspected by an independent specialist. That brings credibility to a CPO program, and eliminates the question of reliance on vague, or non-existent reconditioning standards from the manufacturer. Amid all the industry consolidation, they have their hands full just managing their brands.
  3. Inspections have to be done. Why do them with an in-house tech who can be better assigned to high dollar repair work? An independent inspector will get them done in more detail, at a lower cost per inspection point, and will bring industry credibility to the CPO program.
  4. Reconditioning is still done by your staff of trained and certified RV Techs. What an excellent combination! A CPO program that is backed by independent inspectors; repairs done by YOUR dealership using YOUR experienced, award winning RV techs.​

Cedar Mountain RVI is an independent RV inspection service, that has been rigorously trained and is NRVIA certified using a code of ethics and standards of practice set by RV industry standards. The RV Dealer Certified Pre-Owned Program was created by the RV Inspection Connection, of which Cedar Mountain RV Inspections is a contracted partner.

For more information on the RV Dealer Certified Pre-Owned Program, or to schedule an inspection, visit www.cmrvi.com.

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About Guest Blogger

RV Daily Report welcomes opinion pieces and feature stories submitted by people interested in the RV industry and the RV lifestyle. To submit something for publication, send it to editor@rvdailyreport.com.

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