This Week in Car Buying: Buick Cascada’s final lap; Volvo tweaks CPO program; Buyers will pay more for CPO; Used vehicle prices drop, maybe
Opel, GM’s former European brand now owned by the French PSA group, announced that it will be dropping the convertible Cascada next year along with two small city cars, the Adam and the Karl. Opel supplies the Cascada and the Buick Regal Sportback, Regal GS and Regal Tour X to the GM division. Buick said it plans to sell the 2019 Buick Cascada through the end of that model year but wouldn’t comment on the car’s fate beyond that point.
The 2019 Cascada starts at $33,995 and is the lowest priced full 4-passenger convertible left on the market. While the 2019 Chevrolet Camaro and Ford Mustang still offer convertible body styles, the rear seating in those models is closer to a traditional 2+2.
While there a few minor updates to the 2019 model like moving the backup camera display from the center stack to the rearview mirror, buyers may want to shop remaining 2018 Cascada models on dealers’ lots. Buick is currently offering a 20-percent discount off MSRP if the vehicle loan is taken out from GM Financial. Potential savings are up to $7,500 on 2018 Buick Cascada Premium trim level.
Volvo tweaks CPO program
Recognizing the popularity of its Certified Pre-Owned vehicles, where sales have climbed 18 percent in the last year, Volvo has upgraded its program to include an optional unlimited mile certified warranty with up to 8 years additional coverage.
Called the Certified by Volvo Program, eligible vehicles must pass a 170-plus step inspection. Vehicles must also be five years or newer with fewer than 80,000 miles. A detailed Carfax history is provided with each Certified by Volvo vehicle.
“Certified by Volvo provides immense advantages to us as an organization,” said Rick Bryant, vice president of sales operations for Volvo Car USA. “Our internal data indicates that 60-percent-plus of these buyers are new to the brand and interestingly, are every bit as loyal as our new car buyers. Additionally, as we look into a future where subscription programs like our enormously successful Care by Volvo program reshape the pre-owned vehicle landscape, Certified by Volvo is one of the key strategic imperatives critical to our long-term growth.”
CPO buyers willing to pay more
A quick poll by Kelley Blue Book shows more than a third of buyers are willing to pay about $1,000 more for a Certified Pre-Owned vehicle from a franchised dealer. However, the second highest group, 15 percent, is willing to spend $5,000 or more, compared to 13 percent that would spend $1,500 more and 12 percent that would spend $2,000 more. Combining groups, 62 percent said they would spend up to $2,000. The 15 percent paying $5,000 more points to a segment of the market that may be looking to the luxury market for their CPO purchase.
CPO programs are also growing in familiarity among used vehicle shoppers. A third of shoppers said they are very familiar, while another third is somewhat familiar with the programs. Another 19 percent are slightly familiar why only 15 percent of the respondents said they never heard of the programs.
Used vehicle prices drop, maybe
In the end, it depends on who you ask. According to the U.S. Labor Department, prices for used vehicles dropped 3 percent in September as part of the government’s overall look at the core consumer price index, which is used to determine inflation. The CPI came in under expectations. The department said it was the biggest month-over-month decline since the 1960s, matched only by a 2003 drop of a similar magnitude.
However, data from Manheim Auction’s Used Vehicle Index (Manheim is a sister company to Kelley Blue Book under Cox Automotive) has an alternative view. The index set a record for the third straight month, showing no decline at all. The Manheim index reflects a shift from traditional sedans to more expensive crossover SUVs and trucks and as a result, used vehicle pricing is being sustained by these higher cost vehicles. That index is used to determine what dealers are paying for used vehicles in the wholesale market.
Since the Labor Department uses a fixed basket of used vehicles to create its index, it may not truly reflect the shift away from traditional cars, which now account for less than a third of all new vehicle sales to SUVs and trucks which now command more than two thirds of the market.
According to a report in Automotive News, another reason for the decline is a new Labor Department approach that switched the data to a month-over-month change rather than a three-month average, which could result in more volatile shifts. And while the most recent number showed a 3 percent drop, an unadjusted number curiously showed a 4.2 percent decline in prices. It’s not clear if a corresponding drop in retail used vehicle prices will be seen or felt in the marketplace. One analyst believes that used car prices typically drop in September due to the model-year changeover and that previous calculation smoothed that decline out over September, October and November.
Ford has given its midsize Edge crossover SUV some more edge in the form of the 2019 Ford Edge ST. We get behind the wheel of this 335-horsepower 2-row SUV in this First Review.
Toyota’s popular RAV4 had undergone a major makeover. Get an early look at and video of the all-new 2019 Toyota RAV4 here.
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