Fraud Articles: J.D. Power Releases Used Vehicle Sales, Certification Study
Source Name: AutoRemarketing.com
Vehicle history reports are becoming an increasingly important tool among used-vehicle buyers, especially after last year's hurricanes caused concern about flood-damaged vehicles potentially appearing on the market, according to J.D. Power and Associates 2006 Used Vehicle Sales and Certification Study released Wednesday.
The study discovered that 34 percent of used-vehicle buyers obtain a vehicle history report before purchasing their vehicle, up from 30 percent in 2005. Moreover, the study found that 57 percent of respondents would refuse to purchase a used vehicle without a history report, up from 53 percent in the prior year.
"Vehicle history reports are an inexpensive way to ease the concerns of consumers about potentially buying a vehicle that may have been heavily damaged in a hurricane or other natural disaster," said Jane Crane, director of automotive retail research at J.D. Power.
"Approximately 30 percent of manufacturer franchise dealers are opting to provide vehicle history reports to potential buyers at no charge," she added. "This gesture of goodwill can go far in earning the buyer's trust by showing that the dealer has nothing to hide."
J.D. Power said another way consumers alleviate fears associated with buying a used vehicle is by purchasing a certified unit, which is backed by the automaker. The company said consumers will typically pay an average premium of $1,680 for certified vehicles. Despite this willingness to spend more money for these vehicles, J.D. Power found that certified used-vehicle buyers are less satisfied compared to 2005 when it comes to price paid. "In light of the large incentives many manufacturers were offering buyers of new vehicles in 2005, it may have been harder to convince used-vehicle buyers that this premium was worth it," said Crain. "Dealerships have to work hard to communicate the value of certification to their customers and have strong policies in place to follow through on CPO warranties. This can go far in keeping customers satisfied, which increases the likelihood of the customer recommending the dealer to others and returning to the dealership for future vehicle service."
As for the rising gas prices, the study reported that consumers have responded by turning their attention to used hybrids. J.D. Power found that 44 percent of late-model used-vehicle buyers are willing to consider a pre-owned hybrid over a traditional gas-powered vehicle, even if the hybrid costs more. Major concerns consumers voiced regarding hybrids included hybrids have higher estimated maintenance costs, reliability issues and life-span questions about the vehicle battery pack.
"Previously-owned hybrids are perfect candidates for certification programs, where in-depth inspections and longer warranties help alleviate the concerns of buyers about purchasing used hybrids," Crane pointed out.
J.D. Power executives said the 2006 Used Vehicle Sales and Certification Study is based on responses from more than 12,800 used-vehicle owners, who purchased a 2001 to 2006 model-year vehicles, which was registered between September and October 2005.
WESTLAKE VILLAGE, Calif.
(May 11, 2006)
(May 11, 2006)
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