It’s not a surprise that dealers would say this, at least those in Colorado Springs, but according to them used cars are about to get a whole lot tougher to find and cost a whole lot more.

Basically, it’s Cash For Clunkers that did the used car in, say dealers, who further elaborate that the wholesale market for used cars has seen price hikes of two to three thousand dollars.  Most of the cars that would have gone onto used car lots are now instead languishing and waiting their inevitable destruction after they’d been traded for better, more fuel efficient rides.

Clever, really–with fewer used cars on the market, more people in need of a new car will have little choice but to buy new.  Of course, this is all sort of a joke anyway, because in about two to three years, all the new cars today will probably wind up as used cars when people go to trade them in on new cars once again.  Sure, consumer spending is down, but it’s not out, and a new car will always be high on some folks’ lists.

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As if you needed any more proof that the Cash for Clunkers program was a success — It was recently made known that dealers across the United States have reached their lowest inventory levels since 1975. And, while this may seem like a bad thing, this is great considering the slow auto sales caused by the recession.

However, this isn’t all peaches, considering demand is expected to shrink a hefty amount considering there are no more Cash for Clunkers incentives. Luckily though, due to the low inventory, automakers will now be able to supply dealers with an appropriate amount of vehicles to keep up with demand. So, in turn, there won’t be a ridiculous amount of cars sitting on the lots which got us into this mess in the first place.

via kickingtires

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Congressional Representative Barney Frank from MA has introduced legislation that would rework the second half of the $700 billion federal financial bailout to include government help for auto dealers. The provision would help dealers obtain financing for their 2009 auto inventories, and would also help dealers provide financing to customers. Only $350 billion of the total $700 billion package has been released this far, and Congress is now seeing the approval process as a way to reform the original bill.

Dealerships and would-be car buyers both are suffering under the ongoing credit crunch, with neither group able to obtain the financing needed to get car sales moving again. Frank’s dealer provision will almost certainly undergo changes and challenges before the approval of the second chunk of money passes Congress, but so far it looks like buying a car might get a little easier by spring of 2009.

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