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Used cars affect the car industry in a number of ways. At the present it is wreaking havoc with car prices in the wake of the economic crisis. With the shortage of new cars being produced, used car prices have seen a significant increase, causing turmoil in some cases with used cars costing the same as new cars. The new pressures of the economic downturn over the past few years have forced many consumers away from the new-car market in search of less expensive alternatives, thus used car sales have increased over the past few years.

The reduced production of new cars mixed with other factors such as rising fuel prices and the scraping of federal incentive programs has brought about this change in the car industry.

Leasing

With the industry in turmoil and used car sales on the rise, car manufacturers relied heavily on the leasing of their new cars. But, in 2008 the economy took another turn for the worst and American automakers Chrysler, GM and Ford all began to doubt the value of leased vehicles. All three of the companies were soon forced to either reduce or halt on leasing cars for the foreseeable future.

Since then used car sales have continued to rise, with 70% percent of cars sold in America alone in 2008 being used cars. More recently, this trend continued throughout 2011 and is predicted to be even better this year in 2012.

At the moment the used car industry is selling approximately 3.3 used cars for every new car sold according to industry statistics. This will continue as long as the confidence of consumers stays low. The car industry will also be affected by the hording of newer used cars. Dealers are now offering people top price for their used cars. Dealers would at one time have shied away from cheap used cars, but now realise that they can be an important aspect of a profitable dealership.

The future of the car industry

If it continues this way it means that consumers may soon benefit by buying new cars at discounted prices, and selling their own used cars for high prices. The car industry has gone through a massive change over the last few years, with new and used car prices and availability subjected to wild fluctuations. At this stage one can almost believable that consumers who bought their cars in the past year or two, might be able to make a profit off of one of the most depreciating products on the planet, when they sell it on today’s market.

This article was written by Riley Lambert on behalf of Concept Car Credit. For more information visit the website on www.conceptcarcredit.co.uk.