An August survey by AutoExtra.com found that three out of four driving-age students own cars, half of which were purchased by parents. Of the 500 parents polled in the survey, 82 percent said they bought used cars and most of them cost under $10,000.

Fall is a prime time for teens' first car purchases, especially this year, as July's record high auto sales led to a surplus of cars from trade-ins, which means there's more selection and lower prices on used car lots. But while they were looking for less expensive cars for their children, 90 percent of parents polled in AutoExtra.com's survey cited safety and reliability as their biggest concerns.

As a general rule, safety-conscious parents tend to focus on car size, said Jonathan Adkins, communications director for the Governors Highway Safety Association. Adkins said parents often buy SUVs because they think bigger is better. But only the newest models of SUVs have electronic stability control to prevent rollovers and many parents can only afford the used models.

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.