Times are hard, but lots of Americans still have good jobs, and still want to drive around in style. The result: Demand for lightly-used luxury cars is booming even as new vehicle sales sag.
Manufacturers and auto industry data analysts each rely on different figures for measuring used-car demand. But most agree that demand for used luxury cars is remarkably strong compared to the wilting new vehicle market. The trends suggest affluent car buyers aren’t paralyzed. But they are searching for a new balance between saving money and hanging on to the lifestyle to which they became accustomed in better times.
Buying a well-tended three-year old BMW with an extended warranty is likely prudent thrift in a household where a new Beemer every three years used to be the standard. A second-hand luxury car can also be a status symbol in its own right – a choice that says the owner is fortunate, and has good taste, but knows that now isn’t a time for ostentatious displays.
Mercedes-Benz, the luxury brand of Daimler AG, says its certified pre-owned sales rose nearly 27% in 2008 compared to the year before, and Mark Webster, the manager in charge of Mercedes-Benz USA’s used-vehicle programs, says January sales of certified pre-owned vehicles jumped 86% from a weak year ago.
Overall, Mr. Webster says, sales of certified pre-owned vehicles marketed by seven major luxury brands rose about 31.5% in January.
“The market in the luxury end and the mass market end is under siege,” Mr. Orchowski says. Selling well-cared for, second hand BMW’s “gives our dealerships the opportunity to weather the storm.”
A “certified pre-owned” car – or “CPO” in industry-speak – is typically a two, three or four-year-old car that has been returned to the dealer after a lease. Details of manufacturers’ CPO programs vary. But a CPO car is typically offered with an extended warranty, and assurances that the car has been carefully inspected and found to be free of mechanical gremlins.
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