LAS VEGAS, Nevada - Will membership in another association help used-car dealers - and their customers? Industry folks who established the Pre-Owned Automobile Dealers Alliance (POADA) last May certainly hope so. Focusing solely on the segment of used vehicles that are five years old and newer, with fewer than 100,000 miles on the odometer, POADA is open to any type of dealer: franchised, former franchised, or late-model independent (selling nothing but used vehicles).
Bill Zadeits, executive vice-president of publishing for Auto Remarketing magazine, explained that traditional dealers, many of whom belong to the National Independent Automobile Dealers Association (NIADA) emphasize vehicles that are 6 to 9 years old. Franchised new-car dealers tend to devote most of their attention to the new models. POADA was created to assist dealers in retailing and wholesaling of those particular vehicles, to differentiate them from ordinary "used" cars. Joining up will "help dealers own more of the market segment," Zadeits said, and "make more money in that segment."
Through all the bailouts and bankruptcies that marred 2009, along with the credit freeze, the "pre-owned market segment has remained stable, strong, and secure," said Ron Smith, president of Auto Remarketing magazine. The pre-owned segment "has its own opportunities and challenges." Pre-owned vehicles and traditonal used cars have different marketing images, Smith explained.
In addition to helping to build the dealer's business and increasing profits, POADA promises to grow the value of the pre-owned segment. POADA partners are expected to offer incentives to participating dealers. Regional and national meetings will be held, to help build knowledge and network with like-minded dealers nationwide. Currently, there's no charge for affiliation. POADA is the only national alliance totally targeted to sellers of pre-owned vehicles, and encourages memebership in other dealer groups.
How will POADA help the retail customer? That's not so clear yet, but a dealer who takes a particular segment of his business seriously, and seeks to know as much as possible about it, has the opportunity to pass along benefits to the consumer as well as to himself.
Starting in January 2010, a new certification program for pre-owned vehicles will be offered by POADA-affiliated dealers. In principle, CarMark will be similar to the CPO programs offered by most auto manufacturers, including step-by-step vehicle inspection. Zadeits advised that it's "equivalent to a national OEM (Original Equipment Manufacturer) program and, for franchised new-car dealers, can serve as a "complement" to factory certification. But it won't be brand-specific, and lacks the direct backing of the manufacturer.
Third-party certification progams have been around for years. In fact, they existed before the automakers turned to certification of used cars, starting in the 1990s. Who backs them up when something goes wrong with a certified vehicle? Most often, it's the dealer; but some third-party programs are set up by a trade association or other group that can serve as recourse for the retail customer.
Administered by EasyCare-APCO, the new CarMark program is expected to be far bigger in scope, and therefore more appealing to consumers. Potentially, at least, thousands of retail and service outlets will be available, through POADA-affiliated dealers. As one audience member stated, having plenty of EasyCare repair centers should ease the minds of customers who worry about breakdowns when away from home.
"We know that certified pre-owned vehicles are higher value to the customer," said Larry Dorfman, CEO of EasyCare. CarMark promises to give dealers a wider choice of what they can offer to their customers, many of whom like the peace of mind that certification brings. Certification is essentially based on trust, however, so consumers need a mindset that lets them place as much trust in a used-car dealer as they would in a program backed by a major manufacturer.
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