Yamaha allows dealers to offer 12-month warranty on used PWC
Following a proven trend in the automotive industry, Yamaha Watercraft announced last month that it will be offering dealers a competitively priced program to sell certified pre-owned Yamaha WaveRunners to consumers. The brand hopes the Yamaha Watercraft Certified Pre-Owned Program extends dealers’ reach into the virtually untapped used vehicle market, estimated to be in excess of 100,000 units a year. Currently, an overwhelming 90 percent of used PWC are sold by private parties.
Special flooring, financing
The Yamaha CPO program is relatively simple. Dealers are allowed to buy any used WaveRunner, including rentals, from the past six model years with less than 200 hours on the engine. (The lone exception is the SuperJet.) Those craft will then undergo a 35-point inspection in order to qualify.
Special flooring options are provided by GE, including 30 days free and a reduced rate to follow. Dealer curtailments are also extended, with the first payment not due for six months. Certified pre-owned units qualify for special financing, including 0 percent interest for the first six months, and one point below the prevailing used rate in the months to follow. Perhaps of greatest significance to the consumer, CPO craft will be resold with a 12-month warranty. As many craft may currently have an existing warranty in effect, those 12 months can be added to potentially extend warranties even further. Additional extended service plans can also be purchased at the time of sale.
To participate, a dealer will be required to pay an annual $349 fee that covers marketing materials, including an in-store banner, door decal, hang tags, product clings, brochures, identification as a CPO dealer on the Yamaha website, web advertising, public relations and promotions.
Dealers also will pay a $349 certification fee per unit to cover the one-year YES warranty, enhanced flooring benefits, exclusive retail financing options, certification process and administration.
“Our goal was to figure out how we could be the best partner for our dealerships, and how we could get those [used] customers to come in to our dealerships,” explained Yamaha national marketing manager Bryan Seti. “We know that many buyers, before they bought used, seriously considered buying a new personal watercraft, and that the idea of buying a certified pre-owned unit was very appealing to them as well.
“We wanted to be able to put together a program that allowed these used buyers to start having a relationship with a Yamaha dealership. Instead of just buying a PWC on Craigslist or third party, buyers would actually come to the Yamaha dealership, they’d buy a used unit, and this used unit would provide a better experience, because a dealer would have gone over the 35-point checklist. This is a manufacturer-supported program, and we’re going to back it up with an additional warranty on that unit.”
A trio of winners
According to Seti, it’s a win-win for all involved. Customers will be compelled to visit Yamaha dealerships, where the dealer has the opportunity to possibly up-sell them into a new craft, or sell a CPO unit and possibly an additional warranty, parts, accessories or apparel. Yamaha will benefit from the parts and accessories that are likely to be sold as the dealer qualifies the boats through the 35-point inspection.
“So initially there’s a way here for the dealer to actually generate some income, and we generate some income through the parts and accessories group,” Seti explained. “We think ultimately that we’re going to get new buyers initially, because they’re looking at used, but they now have the opportunity to be upsold. But we’re also creating a relationship with this customer. The dealer is going to know who he is. We’re going to know how to market to this guy one, two, three years down the road. We can put him into some of our customer-attention programs, and we just have an ability here to build our relationship with the customer over a period of time.”
Seti also notes that a CPO craft also now effectively gives the dealer a new, lower-priced, entry-level unit to sell.
“It’s a much easier cost of ownership. We’ve got an entry-level unit that’s out there that costs $8,000 and we call that our entry-level unit. But in reality, to a lot of people that’s quite a bit of money. So now we’ve got something here that’s backed by the manufacturer, and we can offer financing on. So if $8,000 is too much for a VX, the dealer now has something to keep that customer from walking out the door.
“I think used units have gotten a little bit of a negative connotation, but when a dealer can say, ‘I’ve got a certified pre-owned unit,’ everyone knows what that means. It’s such a staple in the car industry. The customer knows there’s someone backing that up, there’s somewhere they can take that unit if they have a problem.”
Early dealer reaction
According to Yamaha, dealer reaction to the program has been overwhelmingly positive, as the CPO program was something many dealers had been seeking. About 60 percent of the dealer network is expected to sign up for the program before the end of 2013. The company hopes participation will be up to 100 percent after dealers see the program in action.
Jeff Dutcher, owner of Extreme Power Sports in Gaylord, Mich., says his dealership already has a tremendous pre-owned PWC market. He feels it will only benefit from the factory backing.
“Our pre-owned business has been strong for about the last three or four years,” Dutcher said. “I think with Yamaha’s quality, and with the idea being very common in the car industry, I think it gives customers a little more confidence when they’re buying used. I think we’ll see more people coming into our market for used watercraft, because they know they have the backing of a dealership, and Yamaha, behind them.”
Others, however, say they’re taking more of a wait-and-see approach to the program.
“To be honest, I’m kind of indifferent about it,” admitted Victor Rodriguez, sales manager at Mountain Motorsports in Conyers, Ga. “Any tool is better than what we had, but I feel like we don’t have enough used watercraft that come through the dealership.”
Will the CPO program potentially change that?
“It’s possible. I’ll certainly be more interested taking a craft in a trade because of the availability of that program,” he said.
Concluded Seti: “For $349, I don’t know why we wouldn’t have every dealer in the program.”