CPO: What Dealers Need to Know About Certified Pre-Owned Trucks

Not every truck buyer wants or needs to purchase a new truck. Many smaller fleets and owner-operators rely on pre-owned trucks for their operations. But venturing into the used truck market can be tricky. After all, trucks add hundreds of thousands of miles to their odometers every year. A lot can happen.

To offer assurance to used truck buyers, some major truck makers have used truck certification programs in place. These Certified Pre-Owned (CPO) programs, like those common in the passenger car industry, are all about keeping trucks (and their customers) within the brand's orbit for a longer time.

The used truck market is notoriously fickle with wide price swings depending on supply and demand. However, despite the volatility, one thing remains constant: A high-quality truck will always command the most interest and the highest price.

Used truck buyers may be smaller fleets and owner-operators who need trucks they can count on day in and day out. They’re less likely to have a spare vehicle that can fill in when a truck goes down. An OEM-certified truck gives them peace of mind that the vehicle will meet their needs for vehicle uptime.

CPO truck programs aren’t new and some have been in existence for 20 years or more. While no two programs are exactly alike, they all share some common characteristics.

• Low-mileage models: Not all pre-owned trucks are eligible for certification. Late-model trucks with low mileage, at least by big truck standards, are often eligible for certification. The definition of “late model” varies by each manufacturer but usually falls within a four- or eight-year range. Eligible trucks are in the 450,000- to 600,000-mile range.
• Multipoint inspection: Trucks aren’t certified until they pass a multipoint inspection by a factory-trained technician. Depending on the manufacturer, that inspection covers as many as 175 key points. Items typically inspected include the engine, after-treatment system, chassis, electronics and safety devices. A thorough examination of the interior and exterior of the truck also is conducted and fluids will be changed out. The inspection is designed to make sure the parts are in good working order and that they comply with DOT requirements. Vehicles also will be road tested. Any items that don’t pass inspection or that don’t meet DOT requirements will be repaired or replaced, or the truck won’t be certified.
• Warranty: The length of the factory warranty on the CPO truck varies but typically is one year, with extended warranty options available for purchase. During the warranty period, parts and labor are 100% covered on designated components.
• Financing options: Many of the CPO truck programs also offer special financing options with competitive loan rates through the dealership. Smaller fleet operators may be especially interested in these undermarket financing options.
• Other benefits: Many CPOs offer access to roadside assistance and towing. Some provide savings on parts and services to customers who purchase certified used trucks.

CPO trucks usually are priced higher than trucks that aren’t certified, which means extra money for the dealer, but ensures that the dealership’s sales staff can clearly articulate all the benefits of buying a certified vehicle to overcome any price objections. The selling point is that these vehicles have been inspected by factory-trained technicians and meet standards set by the manufacturer who then backs up their belief that the truck is in good operating condition with a warranty.

When truck buyers have a lot of vehicles to choose from, the fact that a truck has been certified by the manufacturer may tip the scale in favor of a purchase.

Because CPO trucks come with warranties, the dealership generates business for its Service department as the legalese usually states that such work must be performed by an authorized Service outlet.

In the automotive world, certified vehicles sell more quickly than those that aren’t certified. With enough emphasis on certifying trade-in vehicles, the truck world could follow suit. Ultimately, that means faster inventory turns and lower floor plan costs to the dealer.

Perhaps the biggest reason to sell CPO trucks is that they can help earn buyers’ trust — and loyalty. Prospecting for customers is a long, involved process so anything you can do to cement your relationship with an existing customer is a plus. Also, satisfied customers are more likely to recommend your dealership to other fleets or owner-operators.