Automakers' no-interest financing offers have stimulated new car sales but also have created a glut of used cars. That makes dealers worry about bloated inventory and consumers fume over how little cash they're getting for trade-ins, according to a USA Today story by Earle Eldridge.

Jerry Reynolds, owner of Prestige Ford in Garland, Texas, told Eldidge his used-car inventory has swollen to 600 vehicles instead of the usual 250 on the lot this time of year.

And taking the used vehicles to wholesale auctions hasn't helped. "I took 60 cars to auction and had to bring them all back because I couldn't get any money for them," Reynolds said.

September was the first month ever that Reynolds sold fewer than 200 used cars. It's also the first month he's sold more than 800 new cars, thanks to no-interest financing.

Here's the situation, according to Eldridge:

- Used car prices are dropping. The government's monthly survey of retail prices paid by consumers shows used car prices dropped in September for the sixth month in a row. Prices were down 0.8 percent in September from August.

- Dealers can't get the prices they want for used cars at auctions. They usually sell 60 percent of the vehicles they bring to auctions, according to Tom Kontos, industry analyst at ADESA. "Now, we're lucky to reach 50 percent," Kontos said. Some auctions sell less than 30 percent of vehicles offered.

- Used cars are sitting on dealer lots longer. In October, the average used Chevrolet sat on a new car dealer's lot for 51 days before it was sold. That's up from 43 days in October 1999, according to J.D. Power and Associates. Fords sat for 46 days vs. 43 in 1999; Dodges sat for 47 days vs. 43 days in 1999.

No-interest financing has worsened an already shaky used-car market that has been hurt by a flood of 2- and 3-year-old vehicles coming off leases. Compounding the situation, rental car companies have been dumping some of their one-year-old fleet into the market because of a falloff in business since Sept. 11.

For new-car buyers, the glut can be costly. "Some people are losing $2,000 on trades compared to what they could have gotten several months ago," said Randall McCathren, president of Bank Lease Consultants, a research and consulting firm.

But for used-car buyers, the overabundance of used vehicles means great deals and selection. And, responding to dealer worries, some automakers are now offering loans with rates as low as 4.9 percent on used cars.