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A Glut of Used Cars Puts Buyers in Driver’s Seat

November 13, 2002

The new-car sales steamroller that began last year with the introduction of zero percent financing is beginning to slow, but it has left consumers with their best opportunity in years to pick up a late model used vehicle at extraordinarily low prices, according to the Detroit News.

Nationwide, used-vehicle prices have dropped 3.4 percent in the past 12 months and 5.2 percent since the beginning of the year, according to the Manheim Used Vehicle Index. The

result is a glut of used vehicles jamming dealers' lots, the News said.

Total retail used-vehicle sales dropped by more than 280,000 units over the summer, according to research by ADESA Corp., one of the nation's largest used-vehicle auction companies.

"There are cases of dealers having 600 cars

when you have space for 200," said Paul Taylor, chief economist with the National Automobile Dealers Association (NADA). To unload some of their excess inventory, dealers generally try to sell the vehicles at wholesale auctions. The rub is, everyone has a lot of stock to sell, so

prices are depressed there too, according to the News.

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