The CPO Playbook

Make the Right Call for Your Certified Pre-Owned
Program By Getting Your Entire Team on the Same
How do you build a top-tier certified pre-owned marketing
program in your independent operation?
You build it from the ground up.
That means you start with the basics – a good partner to
help you with your program and train everyone on their role
in the process.
When Peyton Manning was quarterback of the Denver
Broncos, he would yell “Omaha” as he waited for the snap.
Manning’s voice made the entire stadium tense up in
anticipation of what was coming. Most important, his
teammates snapped to a state of mental preparedness.
When the snap came, they could react without thinking.
The offense has the advantage over the defense – the offense knows what’s
about to happen.
Every player knows his responsibilities and if any of them fail to carry out
their assignment the play won’t work. Because they have a plan, the team
moves in unison, beginning at the sound of the quarterback’s voice.
That can happen in your store. You can make is so everyone knows what to do
when you call the play.
When your staff knows which part of the playbook is being used and what
everybody’s assignments are, the store becomes a team.
Manning was able to get buy-in from his teammates because they all knew
the situation. Some plays are designed to get one tough yard and some are
after a big gain.
When everyone knows the situation and the goal of the play, they can carry
out their duties with a more dedicated commitment.
So why are you calling the play for a CPO program?
Even if you know the answer to that question it might not be obvious to your
The answer, really, is easy – to keep up with the competition.
The popularity of certified pre-owned is not showing any signs of slowing down. In
fact, CPO sales set records for six consecutive years, and when the final numbers are
tallied for 2017, they’re expected to break the record again.
Certified pre-owned vehicles are becoming more desirable even though fewer than half
of all customers know what CPO entails.
According to Autotrader’s 2014 CPO research study, 60 percent of car buyers said
they’d like to look at a CPO unit while making a used car selection, but only 48 percent
actually knew what it means for a vehicle to be certified.
Those customers most likely don’t know the difference between warranties that come
with a vehicle and extended service contracts that are purchased.
That leads to several conclusions about how to maximize the value of a CPO program.
Customers have heard of CPO and feel it is a better option. They also know it’s usually
backed by a warranty for some period.
The statistics tell us that to get the full value of a CPO program dealers should not rely
on what customers think they know about certified pre-owned. A full presentation and
explanation allows salespeople to create a need for the program.
For example, at Auction Direct USA, one of the nation’s most successful CPO dealerships,
salespeople walk customers past an education wall that teaches them about Auction
Direct, NIADA and their partnership in the NIADA Certified Pre-Owned program.
Sales is about giving enough information to allow customers to arrive at the conclusion
you want them to. That definition requires your salespeople to have knowledge of what
the dealership’s program includes.
With that knowledge your salespeople can provide customers information that allows
them to consider the value of the CPO program when weighing your dealership’s vehicles
against the competition’s.
The economy continues to grow, allowing more people to be able to buy a vehicle. That
alone is going to create a spike in business.
To capture more than their share of that market, independent dealers must be ready to
compete for every deal.
Analysts agree a majority of used vehicle buyers are interested in at least learning about
That means if you do not have a CPO program, you are left fighting for the scraps among
the minority of customers who don’t know about or are not interested in CPO. And it
allows new car franchises and sophisticated independents to dine on the more lucrative
segment of customers who are searching for certified pre-owned vehicles.
You need to let your team know why the CPO play was called. The people who represent
your programs to the public need to know it will allow the store to stay competitive and
will make marketing to the entire spectrum of the used car business viable.
Once the people who will make your program a success know why you are setting up a
CPO program, the next question to answer is, “Why that one?”
So how do you choose which program to bring into your dealership family?
Factory programs are fantastic – but they’re not an option for independent dealers.
OEMs only certify their branded vehicles exclusively through franchise stores.
Even if independents could get in on the factory CPO programs, they have their issues.
Just a few years ago, for example, the margin for CPO vehicles was as much as $2,500
more than for other inventory. Today, according to research by, it’s more in
the $750-$1,200 range.
That’s still a good return, but when you add in the average price of reconditioning a used
vehicle to factory CPO specifications – including expensive items such as factory floor
mats and four matching tires – most of that profit for OEM programs goes to expenses
that don’t increase the customer’s satisfaction with the vehicle.
Indeed, factory programs are so stringent with their qualifications that they only certify
their brand at a factory store. Which is why some new vehicle franchises have begun to
use independent programs to certify their non-factory inventory.
Without a factory program what are you left with?
There are three main ways to certify a vehicle. OEM programs are one. Independents
can also self-certify through a service contract company.
Or they can find an independent organization willing to certify the dealer’s CPO
The best-known national certified pre-owned program for independent dealers in
the NIADA Certified Pre-Owned program, sponsored by NIADA – an organization
with more than 70 years of history whose mission includes promoting ethics in the
used car industry.
When NIADA wanted to bring its reputation and expertise to the CPO world it
looked for a partner with the ability to certify pre-owned vehicles as well as
experience and financial wherewithal to back those vehicles with a strong warranty.
The exhaustive search for a program administrator led to AmTrust Financial Services
and its wholly owned subsidiary, Warrantech.
“The best thing about that is it’s the same administrator General Motors and Mazda
use for their extended service contracts and CPO, giving independent dealers’
customers the same service a new vehicle franchise would give,” said Warrantech’s
Natalie Suarez, director of NIADA Certified.
As a result of NIADA’s partnership with AmTrust, Suarez said, “we are able to provide a
high-level, complete marketing program for independent dealers.”
NIADA’s program, Suarez said, “is designed to give customers the kind of service in the
event of a breakdown that’s usually reserved for new car dealerships, elevating the
independent dealer in the customer’s eyes.
“And the more repeat and referral business dealers can generate, the less they spend on
conquesting new customers.”
One of the first car salespeople in America was a man named Eddie Rickenbacker, who
was best known as America’s most decorated flying ace, earning the Medal of Honor in
World War I. He also raced in the Indianapolis 500, helped design a vehicle that bore his
name and founded Eastern Airlines.
Rickenbacker always said he learned while selling cars that you had to find your
advantage and move continually towards that advantage, a philosophy that allowed him
to survive countless dogfights over France.
“The one thing I know for a fact is every lot has the same vehicles and the prices are
pretty much the same, so if you want to differentiate yourself from the pack, you better
provide something no one else does,” longtime auto dealer and advertising pioneer Bob
Catterson once said. “If you can’t do something special the only other choice is price,
and price prohibits sales, not makes them.”
NIADA adds to that advantage with CPO partners that include some of the biggest
names in the industry, such as Carfax, eBay Motors and SiriusXM Radio, adding
credibility with customers and making your inventory more visible on search engines.
Not to mention AmTrust, which has earned an A rating on A.M. Best’s rating system
as one of the most stable companies in America and an A+ rating with the Better
Business Bureau.
Once all the people in the store know their part in running the play, it is important for
everyone to flawlessly execute his or her assignment.
As legendary coach Vince Lombardi once said, “You can’t coach a player who hasn’t
been trained.” Before they can execute the plan, your staff must be trained.
Whoever is responsible for certifying vehicles must understand how important it is to
properly communicate the condition of each vehicle to management.
If it costs too much to bring the car up to CPO standards, management needs to
know. And the certifying technician needs to know that not certifying a vehicle also
has a cost to the dealership.
The technicians who inspect the vehicles need to be shown the deeper importance of
their work to the sales process.
In the CPO process, credibility is extremely important. Customers must believe in the
concept of the inspection process. If customers do not believe there has been an
actual technician touching the car, they will doubt the value of the warranty and that
will negate any certification advantage.
Sales must use the NIADA certification checklist in the sales process.
The sales department should leave a copy of the checklist in the glove compartment
of the certified vehicle. The salesperson will pull the checklist out during the
walkaround or demo ride and go over how the inspection affects the customer’s
ownership experience.
The tech’s role is to check every box i
ndividually to give validity to the checklist. He or she can help sales even more by
adding extra details, such as writing the actual numbers for tire tread and brake pad
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