Cash for Clunkers Hurts Used Car Business

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Cash for Clunkers Hurts Used Car Business

By Tierney Modglin

The car industry is booming now...thanks to the Cash for Clunkers program.

However the program only applies to new vehicles...so how is the used car business doing?

Jeff Wendel manager of the used car dealership AutoNet says things are not well.

AutoNet Peoria Manager Jeff Wendel says,"The problem that we see right now is that when you try to buy premium or good used cars is that the prices are way up. You have to pay a lot more for the car than you used to have to and you have to pass that on to the customer. So there's an adverse effect of it for us."

Wendel says Cash for Clunkers has taken about 500–thousand used cars out of the market...probably a third of those were pretty decent used vehicles that typically he would have bought.

He says they are taking away some of the buying potential of small dealers...and as a result there just won't be as many used cars on the lot.

Not all dealerships are hurting places like Jim McComb are still selling used cars.

Jim McComb General Sales Manager says they have some great values right now on the used car market.

Jim McComb General Sales Manager Kevin Lundquist says, "Well the majority of people are coming in looking for new vehicles we're still selling used vehicles but more people are buying new vehicles...we've definitely seen a spike in our new vehicle business but we are still selling used vehicles because not everything qualifies."

While the used car business may be hurting now Lundquist says it probably won't have a long term effect on the industry.

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