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TrueCar projects record certified pre-owned vehicle revenue in 2015

CPO sales to generate $45 billion on 2.6 million units TrueCar, Inc., the negotiation-free car buying and selling mobile marketplace, estimates consumer purchases of certified pre-owned (CPO) vehicles, a growing source of revenue for automakers and dealers, will expand by 11 percent to reach an all-time high this year. TrueCar currently forecasts sales of CPO … Continued

CPO sales to generate $45 billion on 2.6 million units

TrueCar, Inc., the negotiation-free car buying and selling mobile marketplace, estimates consumer purchases of certified pre-owned (CPO) vehicles, a growing source of revenue for automakers and dealers, will expand by 11 percent to reach an all-time high this year.

TrueCar currently forecasts sales of CPO cars and trucks will total approximately 2.6 million units in 2015, up from 2.3 million the previous year. At that level, CPO volume would exceed sales of either new pickup trucks or premium autos, which TrueCar estimates at 2.3 million and 2.1 million units, respectively. CPO supply fell to a 15-year low of 9.3 million units in 2013. However, TrueCar projects the supply of all used vehicles from one to five years old, including CPO units, will rebound to 10.4 million in 2015.

“Improved inventory means we can expect a stellar year for the used market – and particularly for certified pre-owned vehicles,” said Larry Dominique, TrueCar’s executive vice president and president of ALG, TrueCar’s residual value data unit. “Across the industry automakers have enhanced CPO programs to delight buyers with longer warranties, improve their own residual values, and successfully grow volumes of these high-margin products for their dealers.”

In contrast to traditional used vehicle sales, automakers receive revenue from overseeing inspection, refurbishment and providing warranties for CPO units, which are mainly vehicles coming off lease. TrueCar works with automakers to help sell CPO vehicles, offering technology and tools to improve such sales through TrueCar and its trusted affinity partner network.

TrueCar estimates the average transaction price for a CPO vehicle is $17,345 this year, and may generate record revenue of $45 billion. By comparison, an expected 17.1 million new vehicle sales should produce a record $556 billion of revenue this year, nearly three times the value of new single-family home sales in the U.S. TrueCar expects total industry revenue, including new autos, CPO and other used vehicles, of approximately $1.2 trillion this year.

The positive outlook for CPO comes after 15 auto brands set records for such sales last year. Audi, Chrysler, Fiat, Hyundai, Infiniti, Kia, Land Rover, Lexus, Mazda, Maserati, Mercedes-Benz, Mini, Nissan, Porsche and Subaru all reported their highest-ever CPO sales totals in 2014.

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