Honda extends CPO to include 10-year-old vehicles

Honda extends CPO to include 10-year-old vehicles https://ift.tt/82ice7k

LOS ANGELES -- American Honda Motor Co. is expanding its certified pre-owned program to include 10-year-old Honda and Acura vehicles.

The extended programs, called HondaTrue Used and Acura Precision Used, are designed to draw younger, budget-minded shoppers to dealer lots.

"We wanted to make it easy for new buyers to experience our brand," Dan Rodriguez, manager of auto remarketing at American Honda told Automotive News. "We really look at this expansion as a critical way to bring in new customers to our brand — kind of a gateway product,"

The older Honda vehicles, which have no mileage limitations, only receive a 100-day or 5,000-mile manufacturer-backed warranty. That's significantly less than the seven-year/100,000-mile powertrain coverage provided on HondaTrue Certified + and Certified vehicles, which together cover lightly used, current model year vehicles, as well as 2-year to 5-year-old Hondas.

On the Acura side, Precision Used vehicles receive a six-month/7,500-mile warranty.

Acura Precision Certified vehicles, which are up to six years old or 80,000 miles, get the same 7 year/ 100,000-mile powertrain coverage.

But the extended certified programs are meant to give buyers confidence on the front end of the buying process, knowing that their older vehicle has been certified by Honda technicians.

Each TrueUsed vehicle goes through a 112-point checklist that is posted online for customers to review.

"We're going through an extensive checklist to make sure that the car is brought up to a certain standard," Rodriguez said, citing brake pads as an example. "The technicians are required to note the level of wear on the brake pads, and if they're not within a certain standard, those brake pads will be replaced."

Competition

The new program could help Honda compete against the growing market penetration of used-vehicle marketplaces such as CarMax, Carvana and Vroom, which advertise heavily to younger buyers and conduct much of their business in digital environments.

The automaker has been steadily expanding the scope of its CPO programs in recent years. Rodriguez said Honda was a pioneer in putting its certified used inventory online. Now, he said, "we are the first manufacturer to digitize this process," referring to the company's online access to the certification checklists Honda provides.

The U.S. used car market is larger than the new car market, which is making it ripe for disruption. Last year, used buyers gobbled up 40 million vehicles, nearly triple the 15 million new cars and trucks sold in 2021.

"With all this noise out there, all these new players in the market are seeing this huge 40 million number and thinking how they can grab their share," Rodriguez said. This year the used-car market will also end close to 40 million sales and remain "fertile" thanks to new-car supply shortages, he said.

The expanded program, he said, "is a way of bringing in this younger client, then graduating them to our certified pre-owned product, and then eventually getting them into a new car."

That cycle should help Honda and Acura dealers replenish their used car inventories.

"We really want to keep our customers within our network," he said. "And we think our best source of inventory will be the Honda Certified cars that the customer is looking to trade in."