Much like in the auto industry, certified pre-owned (CPO) purchase programs can offer a buyer piece-of-mind with their used equipment purchase. But, offering CPOs may not always be the best decision for your dealership or your customer. There are a variety of financing and support options available across major suppliers like Case IH, Deere and AGCO, however one constant variable is that major suppliers expect higher dollars on certified pre-owned sales. Dealers gathered to discuss what they’ve learned from CPOs during a roundtable moderated by Kyle Kennedy, Livingston Machinery, during the Dealership Minds Summit — Roadmap to Mastering Equipment Remarketing.
More often than not, the cost to recondition a used piece of equipment to meet CPO standards falls squarely on the dealership, dealers say. That’s why it is important for a dealership to do its diligence and to have clear definitions of pre-owned, used and salvage equipment to categorize their inventory and to price accordingly. While it may make your major supplier happy, it doesn’t make sense to dump dollars into reconditioning that salvaged combine in order to sell it as certified pre-owned, one dealer commented.
In a market where everyone is looking for the lower price, justifying the added value and increased cost for certified pre-owned equipment can also prove difficult vs. simply advertising a piece of equipment “as-is” and advertising at a lower price. Depending on the financing and support offered by your suppliers and vendors, a dealer-branded program with in-house warranties can be just as affective and can help you manage your costs as well as your customer’s expectations with their used purchase.