1. May 2014
Certified Pre-Owned Vehicles:
Accelerating Forward

2. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 2
© 2014 NADA Used Card Guide
TABLE OF CONTENTS
The Genesis of Certified Pre-Owned ........................................................................................... 2
Consumer & Dealer Sentiment Aligned....................................................................................... 3
Late Model Supply Helping to Drive CPO Sales ........................................................................... 4
CPO Premiums: Consumer Expectations vs. Actual .................................................................... 6
Conclusion.................................................................................................................................... 7
At NADA Used Car Guide ............................................................................................................. 9
Certified Pre-Owned Vehicles:
Accelerating Forward
The Genesis of Certified Pre-Owned
It might come as a surprise to many consumers that manufacturer-sponsored certified
pre-owned (CPO) used vehicle programs have been around for the better part of 20
years now. Conceived as a means to protect residual values and address the large
number of off-lease vehicles hitting the used market, manufacturers promoted CPO
vehicles as a cost-effective alternative to purchasing new.
Manufacturers encouraged consumer demand for certified vehicles by reconditioning
them to like-new standards and extending bumper-to
-bumper and powertrain warranties to reduce repair
cost fears. In short, CPO gave consumers a third
option for auto purchases in addition to new and
used: superior used.
After growing rapidly through its infancy stage at the
beginning of the 2000s, CPO sales experienced just
incremental gains in the years that followed.
Hindered by higher costs and limited awareness, CPO
sales increased by only 200,000 units from 2003 to
2011 and deliveries consistently fell between 1.5-1.7
million units over the period.
0.5
0.7
1.3
1.5
1.6 1.6 1.6
1.7 1.7
1.5
1.6
1.7
1.8
2.1
0.0
0.5
1.0
1.5
2.0
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CertifiedPre-OwnedSales(millions)
Calendar Year
Manufacturer Certified Pre-Owned Vehicle Sales
Source: Autodata

3. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 3
© 2014 NADA Used Card Guide
CPO sales began to take off in 2012, however, due in
part to recovering auto demand in general as well as
increased awareness of, and consideration for, CPO
units among the more value-conscious post-recession
consumer.
CPO sales reached an all-time high of 2.1 million units
in 2013, up 15% from 2012’s figure of 1.8 million.
With both late model supply and consumer
awareness growing, sales are on pace to hit another
record this year. In fact, CPO sales through April
stood at nearly 750,000 units, up 11% on a prior-year
basis and well ahead of the 3% rise in both new and
used vehicle sales.
To get a better understanding of certified pre-owned sales trends and what’s fueling
growth, May’s edition of NADA Perspective reviews consumer and dealer sentiment
toward CPO vehicles, how manufacturer sales have unfolded, and CPO pricing trends.
Consumer & Dealer Sentiment Aligned
Certified pre-owned vehicles benefit consumers and dealers in a variety of ways.
Consumers are able to purchase a fully reconditioned used vehicle with warranty
coverage similar to a new one, but at a much lower price. These attributes form the
basis of CPO’s value proposition for consumers. AutoTrader.com’s 2013 study, Certified
Pre-Owned: Understanding the Customer, revealed that the number one reason why
perspective CPO buyers consider buying certified is because of peace of mind. This point
goes hand-in-hand with the second most cited reason, CPO’s attractive extended
warranty coverage.
AutoTrader.com also points out that new vehicle affordability and economic concerns
are major reasons driving buyers to CPO units. Another benefit is access to low rate
financing as most manufacturers offer reduced interest rates as an incentive to buy CPO
vehicles. This increases affordability and offsets a portion of their higher upfront costs.
As for dealers, CPO sales support current and future profitability and strengthen
customer loyalty. Since a CPO vehicle is under warranty, consumers are more apt to
return to their original dealer for maintenance and repairs than go to an independent
repair shop.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2007 2008 2009 2010 2011 2012 2013 2014
NumberofPages
Calendar Year
Google Search Results for "Certified Pre-Owned Car"
The number of pages returned for the phrase "certified pre-owned car" by
calendar year.
Source: Google
+109% since 2011

4. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 4
© 2014 NADA Used Card Guide
This increases service and parts business and presents the dealer with an extended
audition to leave a favorable impression so the customer keeps coming back – whether
for service or another vehicle purchase – after the warranty has expired. Further, data
shows that certified vehicles remain on dealer lots for far less time than non-certified
ones. Dealers have consistently reported in NADA surveys that CPO vehicles sell 1–2
weeks faster than otherwise; this not only increases throughput, but also reduces the
amount of money dealers have to allocate to floor plan expenses.
Late Model Supply Helping to Drive CPO Sales
The sharp increase in CPO demand that has occurred over the past two years has come
at an opportune time for manufacturers. After years of declines stemming from the
falloff in new vehicle sales during the recession, late-model supply – or the primary pool
from which CPO vehicles are derived – finally started growing again in 2013.
Per NADA Used Car Guide’s used vehicle supply forecast, late-model supply is expected
to grow by 8% in 2014 and another 9% in 2015;
combined, the 17% increase in used supply through
2015 will act as an additional catalyst supporting a
continued increase in CPO sales.
Brands experiencing the largest increases in late-
model supply have also realized some of the biggest
gains in CPO sales. For example, NADA estimates that
late-model supply for Kia and Subaru grew by 17%
and 13% in 2013, respectively, figures exceeded only
by VW’s 20% rise. Kia and Subaru were also at the top
of the non-luxury CPO sales growth leaderboard last
year, as deliveries for the two increased by 72% and
45%, respectively. As for VW, CPO sales rose by a
more modest 9% in 2013.
So far in 2014, 12 of the 15 mainstream brands
reviewed have reported gains in CPO sales on a prior-
year basis. Sales for the top three performers Kia,
Subaru and Hyundai are up by 44%, 37%, and 26%,
respectively. Not coincidentally, NADA estimates that
late-model supply will grow the most for Kia and
Hyundai this year, while supply growth for Subaru is
expected to be among the industry leaders.
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
AnnualChange
Annual Change in Mainstream Brand Used Vehicle Supply
Vehicles to 5 years in age
CY 2013 CY 2014 CY 2015
Source:NADA Used CarGuide
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
AnnualChange
Annual Change in Luxury Brand Used Vehicle Supply
Vehicles to 5 years in age
CY 2013 CY 2014 CY 2015
Source:NADA Used CarGuide

5. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 5
© 2014 NADA Used Card Guide
Late-model supply for luxury brand Land Rover is
expected to grow more than any other premium
nameplate this year and so far the brand’s year-to-
date CPO sales improvement of 66% is ahead of other
luxury makes. Following closely behind, CPO
deliveries for Jaguar and Infiniti are up by a combined
average of 61%, while Lincoln has increased CPO
sales by 20% year-to-date. It will be interesting to see
if Lincoln can maintain its solid CPO performance as
NADA expects that late-model supply for the brand
will rise by a relatively mild 5% this year.
BMW, Mercedes-Benz and Audi have grown CPO
sales by 14% apiece and NADA estimates that supply
for the group will increase by respective figures of
8%, 11% and 15% over the course of the year.
Certified growth for Lexus and Acura has lagged other
luxury brands, with sales for the two up by 3% and
2%, respectively.
NADA expects used supply to be flat in 2014 for
Lexus, which is likely playing a role in holding back
CPO sales growth. It should be noted that while
growth has been mild, more than 24,000 Lexus CPO
vehicles have been sold so far this year, third most among luxury brands. Things should
improve for Lexus in 2015, as NADA estimates that late-model supply will be 8.4%
higher than this year’s expected level.
0
50
100
150
200
250
300
350
400
UnitsSold(Thousands)
MainstreamBrandCPO Sales
Calendar Years 2011 - 2013
2011 2012 2013
Source: Autodata
0
20
40
60
80
100
120
UnitsSold(Thousands)
Luxury Brand CPO Sales
Calendar Years 2011 - 2013
2011 2012 2013
Source: Autodata
Mainstream Brand CPO Retail Sales
2013 v. 2014, YTD
Make 2013 YTD 2014 YTD % Change
Buick 9,055 11,175 23%
Chevrolet 83,582 93,017 11%
Chrysler 8,285 9,036 9%
Dodge 18,311 21,531 18%
Ford 62,390 77,672 24%
GMC 16,258 20,471 26%
Honda 78,567 77,980 -1%
Hyundai 23,953 30,278 26%
Jeep 12,433 15,658 26%
Kia 9,625 13,830 44%
Mazda 11,518 13,533 17%
Nissan 36,858 43,783 19%
Subaru 10,320 14,150 37%
Toyota 120,220 115,598 -4%
Volkswagen 31,988 29,393 -8%
Source: Autodata
Luxury Brand CPO Retail Sales
2013 v. 2014, YTD
Make 2013 YTD 2014 YTD % Change
Acura 13,116 13,439 2%
Audi 12,311 14,016 14%
BMW 26,314 30,011 14%
Cadillac 6,316 6,705 6%
Infiniti 3,629 5,802 60%
Jaguar 1,172 1,894 62%
Land Rover 2,258 3,750 66%
Lexus 23,388 24,186 3%
Lincoln 6,741 8,099 20%
Mercedes-Benz 33,091 37,716 14%
Porsche 3,260 3,672 13%
Volvo 3,786 4,037 7%
Source: Autodata

6. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 6
© 2014 NADA Used Card Guide
CPO Premiums: Consumer Expectations vs. Actual
Certified pre-owned vehicles cost more than their non-certified counterparts because of
the expenses associated with a comprehensive inspection, repairs required to meet
manufacturer certification standards (e.g., worn tires replaced, cracked windshield
repaired, worn brake pads replaced, etc.) and the bumper-to-bumper extended
warranty. Most CPO programs also include roadside assistance and a free vehicle history
report, and some include free scheduled maintenance (e.g., oil changes, tire rotations,
etc.).
Results from AutoTrader.com’s 2013 CPO study showed that many consumers are still
unfamiliar with all that goes into certifying a used vehicle. More than a third of new car
shoppers were unaware that a certified vehicle was fully inspected and 45% didn’t
realize that a CPO vehicle came with an extended warranty. Used car shopper inspection
and warranty awareness wasn’t any better, as 32% and 46%, respectively, were
unfamiliar with these program aspects.
Consumer unfamiliarity with CPO benefits can largely explain why sizable percentages of
shoppers are unwilling to pay a premium for a CPO vehicle. AutoTrader.com data shows
that while 62% of new car buyers are willing to pay a CPO premium, just 34% of used car
shoppers are.
But while premium willingness is non-existent for some, the amount that agreeable
shoppers are prepared to pay has doubled. In AutoTrader.com’s 2011 CPO survey, the
average acceptable CPO premium for new and used car shoppers was $1,245 and
$1,292, respectively, but these amounts jumped to $2,940 and $2,163 in the 2013
survey.
A review of CPO sales data indicates that premiums
are predominantly well below the consumer
thresholds derived from AutoTrader.com’s latest
report. Records collected by NADA from mainstream
and luxury manufacturers show that 75% of CPO
transactions carried premiums ranging from $500-
$2,000; this disparity implies that CPO’s value
proposition actually exceeds consumer expectations.
As far as the differences in CPO prices are concerned,
NADA concludes that prices are dictated by four
primary factors – vehicle brand, age, price and the
competitiveness of a given manufacturer’s CPO
0
100
200
300
400
500
600
Volume
CPO Premium
NADA Analysis: Distribution of CPO Premiums
The CPO premium relative to a non-certified retail transation price.
Source: NADA UsedCarGuide
75% of transactions have a CPO premium
ranging between $500 - $2,000.

7. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 7
© 2014 NADA Used Card Guide
program (i.e., length of warranty, mileage allowance,
etc.). Correspondingly, these factors and CPO sales
data form the basis of NADA’s certified pre-owned
value methodology and dictate the CPO values found
in NADA’s Official Used Car Guide®.
Generally speaking, CPO values are greatest for
newer and more expensive models backed by
programs that extend bumper-to-bumper and
powertrain warranties out the furthest, while values
are lower for older, less expensive and less
competitive programs.
Currently, NADA’s used vehicle certified pre-owned
premiums range from an average of $1,532 for 2008 model year vehicles to $1,737 for
2014 vehicles*; mainstream brand CPO values range from an average of $1,166 to
$1,371, while luxury values range from $1,992 to $2,381.
At the brand level and specific to three-year old 2011 model year vehicles, Ford’s CPO
value average of $1,486 topped other mainstream CPO values, but was followed closely
by GMC’s average of $1,424. With respective figures of $1,284 and $1,222, Toyota and
Chevrolet CPO premiums are a bit further down the line, while Scion, Suzuki and SMART
each carry CPO premiums below
$900. As for luxury brands,
Mercedes’ average premium of
$2,909 is currently $300 higher
than second-place Porsche’s
$2,605 average, while Acura’s
$1,525 figure is the lowest of the
group.
Conclusion
With demand and supply now
moving solidly in the right
direction, CPO vehicle sales
should achieve meaningful
growth over the next few years.
$0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
$2,750
2008 2009 2010 2011 2012 2013 2014
CPOValue
Model Year
NADA Official Used Car Guide Certified Pre-Owned Values
Average CPO value by model year and vehicle type
Luxury Mainstream Total
Source:NADA Used Car Guide
*Note: 2008 MY averagesare higher due to
changes in Brandmix.
$1,525
$1,650
$1,709
$1,855
$1,870
$1,878
$2,018
$2,068
$2,161
$2,175
$2,605
$2,909
$0 $1,000 $2,000 $3,000 $4,000
ACURA
INFINITI
VOLVO
LINCOLN
CADILLAC
AUDI
BMW
LAND ROVER
JAGUAR
LEXUS
PORSCHE
MERCEDES-BENZ
NADA CPO Values: Luxury Brands
2011 model yearvehicles
Source:NADA Used CarGuide
$750
$844
$883
$949
$987
$993
$1,050
$1,064
$1,067
$1,083
$1,132
$1,134
$1,148
$1,175
$1,182
$1,190
$1,222
$1,284
$1,424
$1,486
$0 $500 $1,000 $1,500 $2,000
SMART
SUZUKI
SCION
MITSUBISHI
MAZDA
KIA
MINI
HONDA
VOLKSWAGEN
CHRYSLER
JEEP
HYUNDAI
BUICK
SUBARU
DODGE
NISSAN
CHEVROLET
TOYOTA
GMC LIGHT DUTY
FORD
NADA CPO Values: MainstreamBrands
2011 model yearvehicles
Source:NADA Used CarGuide
*Note that of the 37 brands with CPO programs, 13 cover vehicles from the 2008 model year or newer and 21 from the 2009 model year and up; as a result,
differences in brand mix (i.e., fewer CPO-eligible mainstream vehicles for the ’08 model year) will influence model year averages.

8. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 8
© 2014 NADA Used Card Guide
To ensure this opportunity is maximized, manufacturers will need to enhance marketing
efforts to clearly outline to consumers all that certification entails. The substantial
benefits associated with buying CPO – the rigorous reconditioning, extended warranty
coverage and peace of mind that the vehicle is backed by the factory and its dealer
partners – should make the task less challenging.
Having a better understanding of CPO premiums should help support certified
consideration as well, especially since CPO premiums deemed tolerable by consumers
are above current sales levels. In addition, consumers who currently believe they can’t
afford a CPO vehicle might reconsider if they had a realistic idea as to what the
additional cost would be and the relative value of benefits for which they would be
paying.
Given that certified pre-owned sales account for roughly 13% of all used vehicle sales at
franchised dealerships, there is huge potential for CPO growth moving forward. In the
end, cultivating consumer familiarity and understanding will play a lead role in dictating
how quickly and how high CPO sales grow.

9. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 9
© 2014 NADA Used Card Guide
AT NADA USED CAR GUIDE
Financial Industry,
Accounting, Legal,
OEM Captive
Steve Stafford
800.248.6232 x7275
sstafford@nada.org
Director, Sales
and Customer Service
Dan Ruddy
800.248.6232 x4707
druddy@nada.org
Credit Unions, Fleet,
Lease, Rental Industry,
Government
Doug Ott
800.248.6232 x4710
dott@nada.org
Automotive OEMs
Stu Zalud
800.248.6232 x4636
szalud@nada.org
Automotive Dealers,
Auctions, Insurance
Jim Dodd
800.248.6232 x7115
jdodd@nada.org
PR Manager
Allyson Toolan
800.248.6232 x7165
atoolan@nada.org
Business Development
Manager
James Gibson
800.248.6232 x7136
jgibson@nada.org
What’s New
Available on iPhone, iPad and Android devices, the recently enhanced NADA MarketValues is
the fastest, easiest and most cost-efficient way to make smart vehicle decisions on the go. This
native app allows you to get your NADA values anywhere, anytime without an Internet
connection. Subscriptions start at $50 per month and when you download NADA
MarketValues from Google Play or the Apple Store for $1.99, you’ll receive a FREE 30-day trial!
On the Road
Dan Ruddy and Larry Dixon are attending the 18th Annual Non-Prime Auto Financing Conference on May 28—30 in Fort Worth,
Texas. Larry is speaking on a panel titled “Optimizing Collateral Values in Auto Financing” on Thursday, May 29 at 4:00 p.m.
Mike Stanton and Jim Dodd are attending the NIADA Convention and Expo from June 23—26 in Las Vegas, where NADA Used Car
Guide is co-sponsoring the National Quality Dealer Awards. Stop by booth 414 to see Jim.
About NADA Used Car Guide
Since 1933, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation
products, services and information to businesses throughout the United States and worldwide. NADA’s
editorial team collects and analyzes over one million combined automotive and truck wholesale and
retail transactions per month. Its guidebooks, auction data, analysis, and data solutions offer
automotive/truck, finance, insurance and government professionals the timely information and reliable
solutions they need to make better business decisions. Visit nada.com/b2b to learn more.

10. Perspective | May 2014
NADA Used Car Guide | 8400 Westpark Drive | McLean, VA 22102 | 800.544.6232 | nada.com/b2b 10
© 2014 NADA Used Card Guide
NADA CONSULTING SERVICES
NADA’s market intelligence team leverages a database of nearly 200 million automotive transactions and more than
100 economic and automotive market-related series to describe the factors driving current trends to help industry
stakeholders make more informed decisions. Analyzing data at both wholesale and retail levels, the team continuously
provides content that is both useful and usable to the automotive industry, financial institutions, businesses and
consumers.
Complemented by NADA’s analytics team, which maintains and advances NADA’s internal forecasting models and
develops customized forecasting solutions for automotive clients, the market intelligence team is responsible for
publishing white papers, special reports and the Used Car & Truck Blog. Throughout every piece of content, the team
strives to go beyond what is happening in the automotive industry to confidently answer why it is happening and how it
will impact the market in the future.
Senior Director, Vehicle
Analysis & Analytics
Jonathan Banks
800.248.6232 x4709
jbanks@nada.org
Senior Manager,
Market Intelligence
Larry Dixon
800.248.6232 x4713
ldixon@nada.org
Automotive Analyst
David Paris
800.248.6232 x7044
dparis@nada.org
Automotive Analyst
Joseph Choi
800.248.6232 x4706
jchoi@nada.org
ADDITIONAL RESOURCES
Connect with NADA
White Papers
NADA’s white papers and special reports
aim to inform industry stakeholders on
current and expected used vehicle price
movement to better maximize today’s
opportunities and manage tomorrow’s risk.
Used Car & Truck Blog
Written and managed by the Market
Intelligence team, the Used Car & Truck
Blog analyzes market data, lends insight
into industry trends and highlights
relevant events.
NADA Perspective
Leveraging data from various industry
sources and NADA’s analysts, NADA
Perspective takes a deep dive into a
range of industry trends to determine
why they are happening and what to
expect in the future.
Guidelines
Updated monthly with a robust data set
from various industry sources and
NADA’s own proprietary analytical tool,
Guidelines provides the insight needed
to make decisions in today’s market.
Read our Blog
nada.com/usedcar
Follow Us on Twitter
@NADAUsedCarGde
Find Us on Facebook
Facebook.com/NADAUsedCarGuide
Watch Us on YouTube
Youtube.com/NADAUsedCarGuide
Disclaimer: NADA Used Car Guide makes no representations about future performance or results based on the data and the contents available in this report (“Guidelines”). Guidelines is
provided for informational purposes only and is provided AS IS without warranty or guarantee of any kind. By accessing Guidelines via email or the NADA website, you agree not to reprint,
reproduce, or distribute Guidelines without the express written permission of NADA Used Car Guide.