Buyers Ready For Factory-refurbished Used Cars, But Few Will Pay A Premium, Study Finds

Republished By Plato

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As some carmakers see opportunity in manufacturer refurbishment programmes, a consumer survey has found one in two carbuyers would choose a factory-reconditioned used car over current approved used vehicles.

Some brands, such as Toyota, have outlined long-term plans for ‘remanufactured’ cars; used cars which the manufacturer takes back at the end of a lease period to factory recondition, replacing certain components and upgrading elements, before reselling them.

The process is already common in the consumer electrical product industry, including laptops and smartphones, and earlier this year Toyota GB managing director Agustin Martin told Autocar that in order to extend its contact time with customers “at least to 10 years”, Toyota will take vehicles back to the factory after their first use cycle and refurbish them “to the best standard” to ensure the second user has as new a vehicle as possible.

The same process could also be carried out, Martín suggested, before the third use cycle, after which Toyota will focus its efforts on recycling the vehicles as efficiently as possible.

However carmakers might have to pile on extra perceived value if they expect their own refurbished cars to earn a premium over others already in the market at their franchised dealers. Skoda approved used event stock on a dealer's forecourt

The survey of 903 in-market car buyers by What Car? found that although 44% said they “would be prepared to pay the same amount” for a refurbished model compared to an approved-used, just 19% said they would pay more.

Yet one in three said they would be tempted to keep their current car for longer if they knew they could have it refurbished with new components by the manufacturer.

The survey revealed that OEMs launching such a service would need to put considerable marketing might behind it, as just 17% of respondents stated they had heard about factory refurbished programmes.

Currently, OEMs spent just a fraction of their annual marketing budget on their existing approved used car programmes as their priority remains to find buyers for new cars.

And OEMs largely leave the responsibility for refurbishing used cars to the standard required by their approved used programme to their franchised dealer network and remarketing partners.

But some carmakers do desire to be closer to drivers in the future, whether first, second or third owners of the car.

Steve Huntingford, editor, What Car?, said: “Manufacturer refurbished programmes are a new concept in the industry, but something we’re likely to see a lot more in the coming years as sustainability and recycling become increasingly important agendas for buyers and brands.

“The concept offers a lot of benefits to buyers, as they’ll know they’ll be getting a factory-standard vehicle for less than the price of a new model, and our initial research shows there’s plenty of appetite for it in the industry.

“The first challenge is to increase awareness, however, as only a minority of buyers are currently aware of the practice.”