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Big Discounts on New Vehicles Put Dent in Used-Car Market

March 31, 2003

On April 1, the big car companies will tell the world how many new cars and trucks they sold in the United States during March. It looks like the industry has staved off a sales collapse despite the up and down news from Iraq. But there are plenty of signs of stress in the car business, according to the Wall Street Journal.

"Just look at used-vehicle prices. It's tricky to generalize about a $376 billion a year market where more than 40 million vehicles are sold, but it sure looks like a fabulous time to be shopping for a used car or truck," the Journal said.

Of course, the flip side of this is that people trading in a vehicle as part of a new vehicle purchase are likely to get less than they might have hoped, according to the Journal.

Manheim Auctions economist Tom Webb said the nearly yearlong skid in used-vehicle prices reflects several factors. A big one is the continuing run of big discounts on new domestic brand vehicles. Another is the glut of supply of used vehicles of all kinds, in part because of the continuing hangover from the leasing bubble that peaked in roughly 1999-2000, the Journal reported.

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