Kia Brags About Its Used Vehicles, Because Off-Lease Sales Are Hot Stuff
The record-setting surge of new vehicle sales as America climbed out of the recession sparked a whole new kind of automotive competition.
A surge in off-lease vehicles returning to dealer lots means the certified pre-owned (CPO) market — once an unsexy afterthought — is now a battleground, and Kia Motors wants everyone to know how well it’s doing.
CPO sales hit an all-time high in 2014, making up 20.8 percent of used car sales at franchised dealers, according to Edmunds. The market only grew hotter after that, with Time telling its readers that 2016 is a great year to buy a used car.
With the off-lease tsunami now swamping lots, it’s not surprising to see Kia issue a press release about its CPO performance. The Korean automaker hit an all-time CPO sales high in June, and nearly matched it in July. In the past year, the automaker’s CPO sales rose 20.6 percent — a figure worthy of bragging about through official channels.
“Autodata’s July CPO retail sales report confirms that when it comes to pre-owned vehicles, Kia is one of the fastest-growing brands in the industry,” the automaker stated, adding that it now owns three percent of the industry’s CPO market share.
Many analysts predict annual CPO sales will hit the four million mark by the end of the decade, meaning press releases flying fast and furious as we move forward into this era of pre-owned bliss. Don’t be shocked if other automakers copy Toyota’s pre-owned leasing plan.
Soon, we’ll all be able to own the three-year-old car of our dreams.
I like the looks of the Optima but it is hard to tell the brand new models from a 2010 model based on looks. It will be interesting to see where the New/CPO/Used market goes in the next few years.
CPO on a Hyundai or Kia means something because you still get the balance of factory warranty - 10/100 drivetrain and 6/60 everything else. On a 2- or 3-year old car, this can be a pretty good deal. However, CPO is a 2-edged sword; it makes money for the dealer, but essentially steals a new car sale from the mfr. Given that we've hit Peak New Car Sales, the mfrs are about to get desperate to sell new metal.
Pre-owned leasing, as a concept, is insane. This has been brought about by the unnatural economic conditions created in the past five to seven years. Mfgs produce for consumers whose wages have not grown enough across the board, and then are left with a glut of turned in lease inventory. Since the secondary market and exports can only absorb so much, lets lease back the continually depreciating asset to the same consumers with stagnant wage growth.
It is really interesting to look at why manufacturers are considering leases on CPO cars. In Toyota's case, it is because they have a ton of cars coming off lease that will lower resale value. In Acura's case, they have a few ILXs coming off lease that will lower the brand value if they don't artificially increase resale value. My husband's parents buy a new base Camry model every 2 and half years. The resale value has been good enough that they can get a new one for the same payment. They are happy that they always have a warranty. If Toyota resale values went down, they would probably just keep their Camry longer.