USA Today reports that used car lots are filling up thanks to the "employee pricing" discount offers which are boosting auto sales. Paul Taylor, chief economist for the National Automobile Dealers Association. told USA Today that used car prices could fall as much as 5% as dealers try to clear out overflowing lots.
Automakers see the possibility that used car sales could cut into new car sales, but are hoping the effect is minimized by a strong overall market for both. "It will wash itself out," predicts Paul Ballew, GM's director of global market and industry analysis, about the used car glut. On the flip side, buyers may get less for their trade-ins.
Buyers will see more recent-model used cars. The frenzied atmosphere of the employee-pricing deals has led more people to trade in even newer cars than usual, says Jack Nerad, editorial director for Kelley Blue Book.
Plus, dealers' new car inventories are depleted of the most popular models. "We're going to have big used car sales this month. We have to. We don't have anything else to sell," says Jack Fitzgerald, who owns dealerships in Maryland, Pennsylvania and Florida.
