NIADA Certified 2.0

By: Jeff Hatch

August 23, 2014

The following article appeared in the 2014 August issue of Independent Dealer and can be found in its entirety at: http://bit.ly/2mpQFBi 

Reintroducing the national CPO program that was built by dealers, for dealers
 
Certified Pre-Owned has become the industry buzzword lately. The CPO model, created by the franchise dealers and OEMs, has set a new standard for used car sales and redefined the way customers shop for cars. In 2013, sales of manufacturer-certified pre-owned vehicles totaled a record 2.1 million units. 
 
National, high-dollar marketing campaigns have educated the car-buying public about the benefits of buying a used car that has been certified, so much that it has now come to be an expected part of the process. Much like a missing CarFax, if a car has not been certified then the customer starts to wonder what the dealer is hiding. 
 
For the most part, independent dealers have been left out of the CPO game. Good dealers, of course, have always inspected their cars and done their best to represent the condition of the vehicle as accurately as possible and some will even stand behind their inventory by offering some type of limited warranty to ease the mind of a wary customer. Even so, customers can still be a little skittish of a dealer-endorsed certified car and many will end up paying more at a franchise dealer’s used car lot to get the label they are after. 
 
That all changes, however, with the re-introduction of the NIADA Certified Pre-Owned program. NIADA Certified has been around for a few years, but recently underwent some extended enhancements and tweaks that have made it an attractive option to customers and a powerful profit-center for dealers.
 
“The NIADA Certified program allows independents to play on an even field with the new car dealers,” said NIADA Senior Vice President Frank Fuzy. “It’s 50 percent easier to sell a car that’s been certified and has a warranty, and we know that today every sale counts!”
 
The NIADA Certified program is backed by Warrantech, an AmTrust Financial Company. NIADA approached the company earlier this year to retool the program and develop something that made sense for independents. Warrantech, who has worked with several other national partners to build similar programs, compiled all the data they could from dealers, consumers and associations to create a program that they say was “built for dealers by dealers.”
 
“We basically asked ‘what do you want’ and then we listened to what everyone said,” National Business Development Manager Natalie Suarez said about the changes to the program. Since it kicked off in January the number of dealers using the program has quadrupled. Suarez says dealers understanding exactly what CPO is, and can be, is part of the reason. 
 
“Customers want peace of mind. They are looking for cars that are advertised and branded as something they can trust and have been thoroughly checked out. NIADA Certified gives them a guarantee,” Suarez said. 
 
Some of the biggest changes to the new program include:
 
Three very flexible CPO Limited Warranty programs which include Basic, Standard and Enhanced options
CPO coverages for vehicles up to 14 years in age and with up to 150,000 miles
100 percent credit of the CPO Limited Warranty investment if the customer upgrades to an NIADA VSC contract
No surcharges
Enhanced NIADA CPO marketing resources, including large window banners, lot flags, etc.
A more seamless, less time-consuming CPO contract form processing procedure
eBay Motors promotion and inventory listing support/endorsement
ASE certified technician vehicle inspection requirement enhancing validity to the customer
 
NIADA Certified is exclusive to NIADA members (FIADA members of course gain NIADA membership automatically). Dealers choose which vehicles they want to certify, as well as the terms (3 months/3,000 miles, 6 months/6,000 miles or 12 months/12,000 miles) of the warranties. Current model year plus 14 year units with zero to 150,000 miles are eligible. There is a cost to the dealer to certify, however, if the customer upgrades to a service contract the fee is waived. Even if they don’t, however, the value added with the certified status can cover the cost. 
 
“There is a small cost to it in the beginning, but it gives leverage to the dealer to ask for more money in the price because of the value it has being certified. Consumers will and do pay more for certified,” Suarez said. 
 
“If you ask them, about one in four customers will upgrade to the service warranty, so the program really pays for itself,” Fuzy said. His dealership has seen so much success by utilizing NIADA Certified that he jokingly says he doesn’t want other dealers to know about it. 
 
“Don’t do it,” Fuzy teases to the other dealers, “because your sales will increase and you’ll be competing with me.”
 
There is more detailed information about NIADA Certified at the official website that has been created for it at www.niadacertified.com. To find out more, you can also call the FIADA office at (800) 237-0448 or go to the website at www.fiada.com

Filed Under: certified, CPO, Dealer, FIADA, Independent, NIADA, pre-owned, Warrantech