The recent recession put used cars in high demand. Their lower price tag meant that consumers weary of the economy could get into a car without breaking the bank. But even as the economy begins to thaw, pre-owned cars and trucks are still seeing demand.

According to ADESA, an auto auction services provider, the average price of a used car is up 7.5 percent compared to last year. That’s good news to used car dealers Chantilly Acura which focused plenty of attention on their pre-owned inventory when the economy took a tumble. One used Honda Accord dealer in Fredericksburg Virginia also saw a steep demand for certified pre-owned models among consumers that wanted to save money, but still wanted some type of assurance in the used vehicle’s quality.

“Folks are paying top dollar for used cars,” said Tom Kontos, ADESA’s chief economist. “When you go trade your car in, you should get more money for it, just because there’s not so many going around.”

In the wake of the rescission, many consumers have learned valuable lessons, not least of which is the importance of saving money. Silver Springs used Lexus dealers agree that pre-owned models will still play an important role for dealers even as the economy recovers.

With the economy and the job market seemingly far more stable than even just six months ago, new car sales are rebounding, but for many dealers it’s the pre-owned inventory that still helps to keep the lights on.

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Car dealers have faced plenty of hardships in recent months, and will continue to run into hardships. While the recent federal stimulus offers tax incentives for car buyers, it’s not all good news for car dealers. While money in the pockets of consumers is always a good thing amid falling car sales and weakened consumer confidence, new bailout plans from Chrysler and General Motors both have outlined ideas that may be even more costly to dealers.

While the automakers attempt to secure $38 billion in federal funding, the government first has to approve their restructuring plans. These plans include many hard decisions. For example, Middle Tennessee Chrysler dealers say Chrysler plans to cut dealer margins, production, and 3,000 workers. As dealers are facing problems, Chrysler dealers aren’t looking forward to reduced dealers and service contract margins. Chrysler executives say that Chrysler dealers must make sacrifices just as other Chrysler employees have. When it comes down to it, these steps must be executed should Chrysler hope to receive vital cash.

Some dealers have been outraged by further concessions being forced upon them, but other contend that it’s a small and minor step toward getting the industry back on track, which Philadelphia Cadillac dealers believe is an import goal for everyone. While there’s been no mention of changes to Chrysler’s brands, GM’s restructuring plan provides consolidation of its brands and dealerships. Additionally, the fate of some of GM’s brands, such as Saab, Hummer, and Saturn, remains somewhat unknown as GM’s restructuring has concentrated on its core brands, including Chevrolet, Buick, Pontiac, Cadillac, and GMC. While some are concerned about the fate of these brands, Louisville Chevy says that GM’s core brand will be most important in keeping the company in the black in the long run.

The effects have been felt less at pre-owned stores like Used Cars NC where the economy has helped to drive costs and prices down to a manageable level for customers.

Regardless of changes at Chrysler and General Motors, both automakers and their dealers are hoping that tax credit will help spur new car sales. The economy has kept many consumers from venturing into showroom, and with additional cash in hand Detroit Chevrolet dealers believe consumers will start spending again. The chief economist for the Nation Automobile Dealers Association also sees this happening, anticipated sales to rise several percentage points this year. While this may be a positive outlook, the 2009 has already had a bad start and many dealers are likely going to find themselves out of business.

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