Regardless of whether or not you’re a manufacturer or a dealer, in searching for opportunities to grow sales I would encourage you to look at your used vehicle customers. I was curious to see for the US new car market if more or fewer customers were coming from a used vehicle over the last few years. I ran some numbers from our research and found the following:

	2012	2011	2010
Used	19.3%	18.8%	17.0%
Certified Pre-Owned	5.8%	5.4%	4.7%

 

This means that if you count used and CPO volumes together, about a quarter of new car customers in 2012 came from a used vehicle (25.1% to be precise) which is up from 21.7% in 2010. This is important because it indicates that used customers represent a sizeable portion of new car sales, and their importance has grown since 2010.

From a dealer standpoint, if the goal is to sell more new cars, then focusing on customers you have previously sold a used vehicle to would not be a bad idea. There are downsides to this strategy however.

Since used grosses can be higher than new, this is an issue if you sell a new car to someone who might have been happy buying used. Dealers won’t make as much from that customer.

Executing this strategy can be a challenge since it would require the used car and new car departments coordinating their efforts which can be problematic if the dealership operates in silos with one department not talking to another.

We asked US consumers if they considered a used or CPO vehicle before they acquired their new vehicle and here too, there’s some interesting numbers for the used market. Just over 9% of new buyers in 2012 considered a used or CPO vehicle. It hasn’t really changed over 2010 but I find it interesting that CPO consideration has increased since that time. The numbers are small but it’s encouraging that this number is going the right way in view of the CPO efforts that are being expended at the brand as well as the dealer level.

	2012	2011	2010
Used	6.1%	6.4%	5.9%
Certified Pre-Owned	3.2%	3.3%	2.9%

 

What lies ahead? US consumers tell us the next time they’re in the market, a used vehicle will certainly be considered. For new car customers who bought in 2012, more of them will consider a CPO vehicle next time out compared to those who bought new in 2010. CPO cars are seen as a more viable option so this represents a good potential opportunity.

	2012	2011	2010
Used	8.5%	9.0%	8.5%
Certified Pre-Owned	4.8%	4.9%	4.4%

 

I would like to get your feedback on the opportunities represented by the used car market? Are you focusing on it more / less / about the same? Any successes? Please let me know and have a good weekend.

Chris

PS And if you’re in Libby, Montana this weekend, join the Igniters Car Club for their Ignite the Nites event. The Poker Run is on Friday with the Neon and Flame Throwing Contest at dusk. Come on over to the main street on Saturday to take a look at over 400 beautiful cars on display – classics, antiques, muscle cars, and even drag race cars. After the awards, the Burn Out Contest is at the motocross track with live entertainment to follow. See you there.