Certified pre-owned sales had a strong May.
According to Cox Automotive data reported by Auto Remarketing, CPO sales reached an estimated 228,521 units, up 6.1% month over month and accounting for 15.7% of all used retail sales.
At first glance, that's a solid performance story. Look closer and you'll find an affordability story.
Vehicles priced below $15,000 carried just a 33-day supply in May, well below the overall market average. Meanwhile, average used-vehicle listing prices climbed to nearly $27,000.
"It's always shocking to me that used retail sales is under 16% for CPO."
— Kyle Mountsier
More on this in the full episode of The Automotive State of the Union here.
If customers can't buy down, where exactly are they supposed to go?
giphy - “Who’s really the endangered species here?”
For years, affordability had a simple answer: move down-market.
Need a lower payment? Buy older. Need a lower price? Add miles. Need a budget vehicle? There were plenty available.
Not anymore.
A shopper looking for a dependable $14,000 vehicle today may find slim pickings. What they often will find is a certified vehicle in the low-$20,000 range with warranty coverage, manufacturer-backed financing, and far less ownership risk.
That's not a compromise. That's a different value proposition.
The smartest stores are positioning CPO as the bridge between affordability and confidence. A customer who starts with a certified vehicle often becomes tomorrow's new-car customer. That's why CPO works best when viewed as a long-term relationship strategy instead of another inventory bucket.
The cheapest vehicle on the lot isn't always the easiest sale. Especially when the customer knows they're one repair bill away from wishing they'd spent a little more.
