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Auto Dealers Adapt as Profitable Used Car Sales Rise


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MORE: Used Car Buyers Guide 1997-2010

Washington DC March 23, 2009; The AIADA newsletter reported that economic uncertainty, tighter credit standards, and stronger warranties on nearly new vehicles are luring price-conscious, credit-squeezed consumers away from new cars and trucks to used ones.

According to the Detroit Free Press, last year, more than 13 percent of new car shoppers left dealerships with a certified used vehicle instead, up from 8.3 percent in 2003.

While new car sales are expected to decline to as low as 10.1 million this year, from dismal sales of 13.2 million in 2008, CNW Marketing Research is forecasting that used vehicle sales will grow through 2012. This year, the firm forecasts used car sales of 40 million, up 9.5 percent from 2008's weak volume of 36.5 million.

Already, 42 percent of dealers are reporting too little used vehicle inventory as a result of the trend, according to a March survey by Wachovia Securities analyst Rich Kwas. He added that was the highest level recorded in the past three years.

This is good news for dealers, who often will make a bigger profit on selling a 2- or 3-year-old car than on selling or leasing customers a new one.

For more on the used car market, click here.

MORE: Used Car Buyers Guide 1997-2010


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