Subaru and Mazda have some of the auto industry’s highest residual values, and both companies just made their certified used-vehicle programs better for consumers and dealers.
Mazda North American Operations is lengthening its used-vehicle warranty from 3 months/3,000 miles to 12 months/12,000 miles. Mazda and Subaru of America are both including incentives for dealers and drivers.
Projections from Automotive Lease Guide for July and August 2010 predict that Subaru vehicles will hold 53.2% of their original value at the end of a 36 month period. Mazda cars and trucks (2010 models) are projected to hold 53.0% of their value after 36 months. The industry average projection is 45.5%.
Subaru COO Tom Doll recently spoke about the company’s program: “With the used car market improving the way it has, it allows us to take a fresh look at certified pre-owned (vehicles) and implement a more effective program.”
Subaru dealers who buy 2007-09 Legacy sedans from the company at lease-end or at auction from June 2 through September 30 will not have to pay the usual $495 certification fee, says Doll. Also, beginning June 2 and ending September 30, qualified buyers of those vehicles will also be offered 2.9% financing on 24- to 48-month contracts.
Subaru offered 24- and 36-month leases to buyers of 2007 through 2009 year models, and these leases were timed to end at the same time as the 2010 Outback wagon and 2010 Legacy were released last year. With those contracts about to end, Subaru is expecting many of the vehicles to be back on the market this year.
Subaru used certified vehicles accounted for about 1% of that market through May. Doll says, “We think we have an upside potential of another one percent.” This June, the company sold roughly 46% more used vehicles than it did last June.
Last month, Mazda saw a 9% increase in used vehicle sales over June 2009. Manager of remarketing and certified used vehicles for Mazda, Eric Watson, says the enhancements will hopefully enable dealers to sell 12,000 to 15,000 certified used vehicles this year and over 20,000 per year after that.
Mazda dealers will now pay around $50 less for certification of vehicles, and the company is offering 2.9% financing on 36-month leases for qualified buyers of certified 2006-10 Mazda3 and Mazda6 cars and CX-7 and CX-9 crossover vehicles. Mazda’s program ends August 2.
Watson said that the company did not have the resources in prior years to put much emphasis on the certified used vehicle program. However, Mazda has strived to increase the residual values of its vehicles and to protect them. Enhancing the program now is part of that strategy.
He added, “We believe it is necessary to give dealers a tool to sell these cars and to deliver a good value to the customer.”
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