Certified Pre-Owned Bikes Yet to Find Traction

Publish Date: 
Apr 29, 2008
By Guido Ebert

WHILE CERTIFIED pre-owned programs (CPOs) are big business in the auto industry, with many OEMs each offering their own version, powersports manufacturers appear to be less inclined to enter the business.

Only three companies currently offer CPOs. One is a fledgling program introduced late last year, one is a two-year-old option with an uncertain future, and one is a five-year-old option based on a successful automobile lease program.

H-D's 'Better Way To Buy Pre-Owned'
It seems Harley-Davidson hopes to capture a greater share of business in the pre-owned market with a new campaign beckoning consumers to check out the company's Factory-Backed Used Program.

Evidently designed to instill a greater sense of trust in pre-owned Harley-Davidson motorcycles, the Factory-Backed Used Program certifies each bike undergoes a 170-point inspection, includes a 12-month/40,000-mile factory warranty, and offers buyers Harley Owners Group membership and Roadside Assistance at the "ULTRA" level.

Although Harley-Davidson advertises Factory-Backed Used as "the better way to buy pre-owned," company officials declined to speak about the program: "We just launched the pilot late last year, and it's only in a handful of locations and states, so we think it's just way too early to talk about it," says Harley-Davidson's Paul James.

'Suzuki Select' Faces Uncertain Future
American Suzuki Motor Corporation (ASMC) launched its Suzuki Select Certified Pre-owned Motorcycle Program in October 2006. Now it appears the future of the program is in question.

Suzuki dealers must meet several requirements to showcase Suzuki Select certified products, including the employment of one or more Suzuki qualified and trained technicians, high customer service scores, a position of good standing with ASMC's credit department and compliance with other program criteria.

To be certified, the Suzuki street motorcycle or scooter must be less than four years old, have less than 30,000 miles, and pass a 77-point inspection by an authorized Suzuki technician. The units then come equipped with a standard 90-day extended protection plan that can be upgraded to 12, 24 or 36 months, as well as 90-day roadside assistance, which also is renewable.

Suzuki announced Suzuki Select at its 2006 National Motorcycle Dealer Meeting in Las Vegas. At the time, the company said it hoped to draw more customers and boost sales, and it introduced point-of-purchase materials, including posters, brochures, hangtags, headlamp stickers and ad slicks, to help dealers effectively launch the program at retail.

So how has Suzuki Select progressed within the past two years?

"The program hasn't gotten the traction we were looking for and I'm in the process of determining our options," says Bob Mueller, Sales Development Manager, ASMC — Motorcycle Division. Mueller says he'll make recommendations and then wait to learn what top management wants to do going forward.

BMW Mum On CPO Program
BMW's Certified Pre-Owned Program in its fifth year, but consumers wouldn't know it. Like Suzuki, the German OEM fails to promote its certified pre-owned motorcycle program in consumer advertising and online media.

BMW of North America, LLC introduced the Certified Pre-Owned BMW Motorcycle Program in the United States in December 2002 as a way to offer value-conscious motorcyclists an opportunity to ride a European import.

At the time, BMW leadership said the program would provide the tools necessary for retailers to expand their used-motorcycle sales business and bring additional revenue to their service and parts operations.

The Certified Pre-Owned BMW Motorcycle Program offers buyers BMW Roadside Assistance and covers the bike with Certified Pre-Owned BMW Motorcycle Limited Protection Plan for up to two years or 24,000 miles in addition to the three-year/36,000-mile BMW New Motorcycle Limited Warranty. All BMW motorcycles in the program must be properly enrolled, inspected and retailed by an authorized BMW motorcycle retailer, and participating dealers must devote a portion of their showfloor specifically to the offering.

BMW's automobile-related certified pre-owned program received the "Best Residual Value Award" in 2007 from Kelley Blue Book, and BMW North America has called the program one of the fastest-growing areas of its business. So how has the motorcycle-related program progressed?

BMW won't say — a fact which may in itself speak volumes.

Intrigued, Dealernews asked retailers for their thoughts about the programs. All asked to not be identified.

"There is potential if it is offered properly," says one three-location Harley-Davidson dealer who claims to make an average of "20 percent plus" profits on used bikes. "Look at the automobile industry. It works very well there and could with H-D if they play their cards correctly. They have a tendency to overkill or make too many qualifications."

Dealers representing BMW and Suzuki also mentioned "too many qualifications" and "necessary criteria," and criticized the OEMs for not supporting the programs with an adequate amount of mainstream advertising.

One dealer, when asked what the problems were with OEM programs, pointed out the obvious — there's not even mention of the programs on either the BMW or Suzuki consumer Web sites.