How GM is trying to talk used car shoppers into buying new vehicles

Summary

• Affordability challenges are driving buyers from the new vehicle market to used cars, prompting automakers to compete with online retailers to regain customers.
• New vehicle sales offer higher profitability for automakers, while dealers profit significantly from reselling trade-ins as used vehicles.
• Online retailers like Carvana and CarMax have increased competition for traditional used car sellers.
• General Motors revamped its certified used vehicle program under the CarBravo name, creating an online portal for Chevrolet, Buick, and GMC dealers to list certified vehicles nationwide.
• Approximately 1,615 of GM's 3,700 dealers are enrolled in the CarBravo program, excluding Cadillac which maintains its own separate program.
• Certified used vehicles undergo thorough inspection, reconditioning, and come with manufacturer guarantees and warranties.
• GM uses CarBravo to certify vehicles from other automakers that arrive at dealerships as trade-ins, aiming to avoid wholesale auctions in favor of direct sales.
• GM targets 250,000 sales through CarBravo in 2026, with projections indicating less than half will result in new car purchases.
• The program provides customers access to the GM dealership network for service, a key differentiator from online sellers.
• About 38% of shoppers initially seeking used cars through the program end up purchasing new vehicles.
• Dealers use price comparisons between used and new vehicles to encourage customers to choose new cars, often leveraging lower monthly payments from longer loan terms.
• The average transaction price for a new vehicle is approximately $50,000, while the average 3-year-old used car costs about $30,000.
• Industry analysts note that customers prioritize monthly payment costs over sticker prices, with new car loans often extending to 5 or 6 years compared to 3 or 4 years for used cars.
• The share of new car loans lasting 84 months reached a record high of more than 25% in the third quarter.
• About 50% of buyers acquired through GM's program are new to the brand, and 70% had never visited the dealership prior to purchasing.
• Warranty-backed used car buyers return for service visits at higher rates, contributing significantly to dealership profits.
• GM plans to expand revenue through software and subscription services like OnStar and Super Cruise.
• Ford Motor certifies vehicles from other manufacturers through its Ford Blue Advantage program, targeting 450,000 total sales in 2026.
• Toyota reports that about 40% of its used car shoppers convert to new car buyers.
• Honda states that certified preowned customers return for service at a rate 18% higher than non-certified buyers and purchase new cars at a rate 7% to 8% higher in the future.