As the U.S. Federal Reserve gradually increases interest rates, a strong certified pre-owned program becomes more and more vital for lenders and their dealer partners, Kevin Cullum, president of Nissan Motor Acceptance Corp., told Auto Finance News.
“As interest rates rise, the demand for used cars, our off-lease vehicles, have been rising with it,” Cullum said. “Our CPO program continues to grow on a monthly basis and year-over-year, and I attribute that increase not only to awareness of the brand but also the residual impact of rising interest rates that will increase the cost of ownership and financing for consumers.”
The Fed raised interest rates 25 basis points on Wednesday to a range of 2% – 2.25% — the third hike this year. The central bank is highly likely to hike rates again in December and three more times next year reported The Washington Post.
Although the Fed’s rate hikes seem to be a sign of confidence in the strength of the economy — lenders still need to “bridge the gap” for customers that may struggle to afford vehicles from OEMs they prefer amidst a rising rate environment, Cullum said.
To that end, Nissan expanded the role of Carfax in the Nissan and Infiniti CPO programs. The companies announced this week that the new expansion means consumers have access to get enrolled in the free myCarfax program, so they receive service and recall alerts for their vehicle from Carfax.
The enrollment aspect is new, but Carfax and certified Nissan and Infiniti dealers have worked together since 2012 to run CarFax reports on all CPO-eligible vehicles.
“Nissan’s decision to register their CPO customers with myCarfax helps reduce the cost of car ownership while increasing certified dealer revenues,” Vern Poyner, general manager at Carfax, said in a press release. Nissan North America is the first to make customer enrollment in myCarfax part of the CPO purchase process.
Other benefits of the program integrated into Nissan’s CPO program is that the enrollment program also makes the selling dealer the designated favorite shop within myCarfax. The result is more repeat service business and homegrown vehicles staying with that dealership.
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