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The Salesperson Provides Strong Influence With Certified Pre-Owned Vehicles, Study Says

September 21, 2007

WESTLAKE VILLAGE, Calif. — Although the price of a certified pre-owned vehicle is important, the salesperson is key in influencing both customer consideration of and satisfaction with certified pre-owned vehicles, according to the J.D. Power and Associates 2007 Used-Vehicle Sales and Certification (UVSC) Study.

The study, now in its sixth year, measures seven factors contributing to customer satisfaction with certified pre-owned vehicles (listed in order of importance): price; salesperson; vehicle condition; financing and insurance process; certified pre-owned (CPO) vehicle program features; inventory; and delivery. Redesigned in 2007, the study primarily focuses on CPO vehicles that have been certified by manufacturers rather than by dealers or other third parties.

The study finds that 57 percent of certified pre-owned vehicle buyers say they learned about CPO vehicles from their salesperson and 38 percent of CPO buyers cite the salesperson as the most influential contributor to the decision to purchase a CPO vehicle.

"Shoppers in the market for a used vehicle have a complex array of factors to consider, particularly regarding price, warranty and vehicle condition," said Jane Crane, director of automotive retail research at J.D. Power and Associates. "A salesperson who is effective at conveying the advantages of purchasing a CPO vehicle-including explaining the certification process and terms of the warranty-and who displays concern regarding the shopper's budget, can be particularly effective in influencing buyers to consider and ultimately purchase a certified pre-owned vehicle."

In addition, buyers who report that their experience with the salesperson ranged from "outstanding" to "truly exceptional" provide satisfaction scores that are considerably higher than those customers who are not as pleased with their salesperson — particularly in the price and CPO vehicle program features factors. Customers who say that their salesperson offered vehicles at a fair price and provided straight answers about vehicle price and condition provide overall satisfaction scores that are 200 points higher, on average, than customers who say this was not their experience.

"Not only is it important for the CPO salesperson to gain shoppers' trust by treating them with honesty and fairness, but it is also critical for dealerships to build on that trust by following through on their commitments to customers once a sale is complete," said Crane. "Customer satisfaction drops considerably if dealers fail to respond to customer post-purchase phone calls, follow through on post-purchase promises or treat buyers well when they return for service."

The study finds that highly satisfied CPO buyers demonstrate greater brand loyalty than less satisfied CPO buyers, and are up to seven times more likely to say their CPO vehicle exceeded their expectations. In addition, highly satisfied CPO buyers are up to four times more likely to say they would "definitely" repurchase a CPO vehicle of the same make, and more than twice as likely to say they would "definitely" purchase a new vehicle of that make. These highly satisfied buyers are also much more likely to return to the selling dealer for service, and considerably less likely to use a non-dealer for service.

The study also finds that selling CPO vehicles can provide considerable financial benefits to dealers, when compared to selling non-CPO vehicles, including higher sales prices and return on investment. On average, CPO vehicles generate sales prices and returns on investment that are several hundred dollars more than those of like-quality used vehicles that are not part of a certification program. In addition, CPO vehicle makes typically sell eight to ten days faster than used vehicles that are not certified, on average.

"There has been steady growth in the CPO market over the past several years, with both manufacturers and customers realizing the benefits that certified pre-owned vehicle programs bring," said Crane. "Manufacturers can enhance consideration of their programs by educating consumers to ask about manufacturer-backed certification-not unlike advertising campaigns that instruct consumers to ask for genuine manufacturer parts. The study finds, not surprisingly, that dealers can further increase consideration of CPO vehicles by providing clear signage to the CPO vehicles, organizing inventory in a logical order and ensuring that CPO vehicle inventory provides customers with ample choice."

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