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Used Car Sales Are Falling

ucs.jpgThe automotive industry has seen the largest drop in used car sales in almost a decade.  Industry monitors report that in the third quarter of 2007 alone sales dropped by over 3 percent.  Sales of later model cars that are three years old or less have dropped off the most, losing almost 10 percent of their sales.

 

Some new car programs are partially to blame for the used-car sales drop off.  Increase in some of the coverage offered by new car warranties, special insurance incentives, and finance deals as low as zero percent have buyers looking at new vehicles as opposed to late-model pre-owned cars.  Over the long haul this will probably cause used-car prices to drop off considerably.

 

This change has surprised the industry as the third and fourth quarter of the year usually see a slight increase in the seller used vehicles.  The outlook is that conditions will probably continue to be tough for dealers who sell used vehicles, especially with the economy in its current condition.  The auto industry, during a recession, usually takes one of the biggest hits in the financial world.

 

One industry that will probably benefit from the current market conditions will be the auto warranty industry.  Used car warranties will continue to be a necessity for most vehicles on the road.  As consumers will tend to keep their vehicles longer, used car warranties will protect them from having to break the bank for the repairs on these older vehicles.  At least the auto warranty industry will see some benefit from the current economic conditions.

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Posted on Wednesday, January 30th, 2008 at 7:43 am In Used Car Warranties  


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