Monday, February 23, 2009

Why Used Cars Are Outselling New Vehicles

Why Used Cars Are Outselling New Vehicles : "Kathy Roberts, a paralegal from Plymouth, Mich., was skeptical of a recent postcard she received from her local car dealer. It offered to put her in a new vehicle for $26,000, the same price she paid for her one-year-old Dodge Journey that she'd already driven 14,000 miles. Despite her doubts, Roberts's husband called the dealer and was told that they would offer her a brand new version of the same model, in the same color, with only 29 miles—all for the same monthly payment. With incentives and rebates, she actually came out $700 ahead. 'I was thrilled. A new car without any more money!'

Customers like Roberts are finding that their high-quality used cars are a coveted and rare commodity these days. While GM and Chrysler hit the federal government up for bailout money and new car sales have been notoriously slow in the last few months, the demand for used vehicles is up. According to Auto Data Corp., sales of certified pre-owned cars in January 2009 were up 10 percent from the same time last year. The average consumer trades in a vehicle after two or three years, providing steady supply of low-mileage used cars. But as household budgets and credit remain tight, drivers are hanging onto their cars longer and returning them to dealers when they're essentially junk."