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The United States has tightened its grip on the used car business because dealers are selling more recycled cars than brand new ones. In 1996 for example, 106 car
dealers reported the sale of more used cars in their lot as compared to only 75 dealers in 1992. The sale of used cars has become quick business, particularly the
pre-owned cars, which accounted for the majority of cars sold. Buyers will argue that a newer model car that sells, will sell twice its retail price when eventually
it sells as a used car.
Buyer preference for pre-owned cars is low mileage, especially in the case of off-lease vehicles. Late model vehicles show the exertion of renewed sales, especially
if properly reconditioned and warranty included. Car dealers admit though that used cars give wider profit margins than brand new cars. Some dealers reported earnings
of up to two to three times higher than new cars. This kept many dealerships afloat despite demanding times.
Buyer perception of used cars today is totally different from previous years, where used cars were portrayed as unreliable with an aesthetic decay. The distinction
today has been somewhat bridged, because used car buyers expect the same level of quality found in brand new cars. To satisfy the high quality expectations of used car
buyers, dealers and car manufacturers should always keep their certification programs intact. In-house used car certification has been the most common type of services
for most car dealers.
Manufacturer certification is a vital factor that flock buyers to franchised dealerships that participate in this program. With this program, used cars have been
outperforming the sales of new cars since 1996. If dealers spend a few hundred dollars to recondition its vehicles and make it more road-worthy, this would increase
the salesman's level of confidence, where it can deliver a profit margin of $ 2,000, which is more than what is expected if the car is sold on an "as is" basis. Most
car dealers do not see a manufacturers' certification as an expense, but rather as an investment since it puts forth more, while reducing the haggling and negotiation
involved for a deal to push through.
Another promotional idea started out by car dealers, is having the display of reconditioned cars alongside newer cars in showrooms. This concept boosted sales and
increased the sales of used cars. Dealers today patronize the total reconditioning of used car stocks to tap the sales potential of the market. In the end, this
development practically diminishes the distinction between used cars and brand new ones.
