C4C Depresses Used-Car Values — Temporarily

“Cash for Clunkers”-induced new-vehicle sales put a damper on used-car prices in August, but auction rates should head back up as demand remains strong.

Wholesale used-car prices averaged $9,949 in August, down 0.7% from July, according to fresh data from ADESA Analytical Services. But inventory levels for used vehicles remained relatively low at 33 days and conversion rates were still high, according to ADESA, which means demand is still there.

In a nutshell, unemployment rates are nearly in the double digits and consumers are wary of plunking down tens of thousands of dollars for new vehicles. So while C4C may have sparked a disproportionate number of new-car sales, used-car dealers have nothing to fear going forward, as buyers gravitate toward the safer bet of lower cost vehicles.