The Cash For Clunkers program had a double effect: it drastically reduced new inventory stock from increased sales and took just as many used cars off the road.  The program was primarily aimed at old, gas-guzzling, inefficient vehicles but many of the vehicles destroyed under the program could have been resold on the used car market.

Shortage in supply means an increase in demand among dealers, or anyone looking to buy used, and prices increase as a result.  “There’s a lot of people out there looking for more used cars than new cars right now, which definitely drives the used car prices up,” said Lori Sisulak, general manager at Ike Honda in Marion.

However, there are signs now that used car prices are falling.  Manheim reported that used car prices reached a plateau in the last week of September.  Since then used cars prices and conversion rates are falling at auctions.  Going forward this provides better opportunities for buyers than there has been for some time.  The same scenario is reflected in both live and online auction marketplaces.  Online supermarket Autoquake.com’s co-founder Fredrik Skantze says that the values of used cars are falling fast.  “After months of rising prices, we’re seeing signs that the used car bubble has burst” he said.  “Values at auction have begun to slide and our prices are lower than they were a month ago”.

Whatever the current situation, market forces, through supply and demand, will ensure that used car prices don’t stay high forever.

Government Auctions

Always a popular choice, your local government auction where the government offloads the cars it seizes for non payment of tax and other violations of the law.

If you’re not looking for any particular make of car and just want a cheap run around then this is a good option. There’s always a large selection available to choose from, so you should be able to find something that suits you.

On the downside if you’re after a specific make or model then you may be out of look. Unless it’s a particularly popular car, you’re unlikely to find one that exactly matches your specification and colour.

Online

Going online is now the first place most people look for a used car, eBay being perhaps the most popular place to start. There are literally thousands of cars to choose from so you’ll be spoilt for choice.

If you know the kind of car you want and are after a specific make and colour then this is the first place you should look. You might have to travel to get it, but you should be able to find exactly what you’re looking for.

Local Paper

This is the second most popular place to look for a car. While the selection isn’t as large as you’ll find on the internet there should still be a huge range to choose from, so long as you’re not too picky.

Remember if you’re not mechanically minded always take a friend with you to check the car over. This should save you from having any nasty surprises when you get it home.

Local Dealer

Sometimes overlooked by people looking for a used car bargain, your dealer is nevertheless a place you should go. Times are hard right now for car dealers so they’re unlikely to turn down any serious offer. And because you’re buying from a dealer you’ll still be able to get a warranty which could be worth thousands in its self.

Remember never pay the ticket price; always drive a hard bargain, especially at the moment. Most dealers at the moment will be willing to accept the trade price or at least just above it so deal hard and you could come away with a real bargain.

Government Auctions

Always a popular choice, your local government auction where the government offloads the cars it seizes for non payment of tax and other violations of the law.

If you’re not looking for any particular make of car and just want a cheap run around then this is a good option. There’s always a large selection available to choose from, so you should be able to find something that suits you.

On the downside if you’re after a specific make or model then you may be out of look. Unless it’s a particularly popular car, you’re unlikely to find one that exactly matches your specification and colour.

Online

Going online is now the first place most people look for a used car, eBay being perhaps the most popular place to start. There are literally thousands of cars to choose from so you’ll be spoilt for choice.

If you know the kind of car you want and are after a specific make and colour then this is the first place you should look. You might have to travel to get it, but you should be able to find exactly what you’re looking for.

Local

Paper This is the second most popular place to look for a car. While the selection isn’t as large as you’ll find on the internet there should still be a huge range to choose from, so long as you’re not too picky. Remember if you’re not mechanically minded always take a friend with you to check the car over.

This should save you from having any nasty surprises when you get it home.

Local

Dealer

Sometimes overlooked by people looking for a used car bargain, your dealer is nevertheless a place you should go. Times are hard right now for car dealers so they’re unlikely to turn down any serious offer. And because you’re buying from a dealer you’ll still be able to get a warranty which could be worth thousands in its self.

Remember never pay the ticket price; always drive a hard bargain, especially at the moment. Most dealers at the moment will be willing to accept the trade price or at least just above it so deal hard and you could come away with a real bargain.

Before attending an auction it is important to do some research and know what you are doing.  But with a little effort anyone can bid and buy the car of their choice.

There are both private and Government auctions.  The US Government are continually changing over their fleet of cars which have been well maintained.  The Government also needs to dispose of vehicles that they seize, impound and repossess.  Car auctions provide a quick and easy means to do this.  This provides smart buyers with plenty of bargain deals.

You can also look for discounted sales from auto dealers. In this economy, many auto dealers are lowering their prices to get more consumer sales. Thirdly, the Internet is a source of information to finding low prices on specific car models.

You can also check the local newspaper for low priced cars being sold by other vehicle owners. Couples who own two cars are now trying to get rid of one of them to save on gas and to omit any unnecessary expenses that would put them in a bind. You will find most of these people are willing to negotiate their prices and agree to your best offer.

However, the government auctions are primarily the main source of cheap cars. The government agencies put on car auctions at various times of the year so that they can lighten their inventory. These vehicles may have been seized by the police from criminals and are usually luxury vehicles such as Mercedes, BMW and Lexus. They are usually in good condition and being sold for a lower price than the retail price.

In their inventory, the government also includes vehicles that have been left stranded on the highway. In most cases, these vehicles may have slight mechanical problems, but there are some that are in good running condition.

Banking institutions also hold their own auctions after repossessing vehicles that their customers may have stopped paying on. These vehicles, like real estate property, are auctioned off to the highest bidder. The bank does not want to hold these vehicles in their inventory and so it is in their best interest to sell it to the general public.

There are websites online such as ebay that allow car owners to sell their cars on their website. The prices are usually fixed and in some cases, you are able to bid. The only disadvantage associated with this method of buying a used car is the fact that you won’t be able to visibly see the car and inspect it. If you purchase the car out of the state in which you live, you will have to pay shipping cost to get the car to you.

Even though a government auction does not come with any guarantees, you are able to inspect the car before buying it. Bidding usually starts at a low price of about $100 so it gives you an opportunity to get involved in the bidding process and be able to pull out if the price goes up too much. Government auctions are well worth a look.

In the US the recently ended Cash For Clunkers rebate offered by the Government has taken a lot of older used cars off the road leaving less used cars around. This too has had the affect of increasing used car prices as dealers and auctions compete for less vehicles.  Adesa expects used car prices to continue to climb for the rest of 2009.  In the longer term it is expected the rental car and fleet sales could result in more trade-ins and therefore higher used car investories.

Consumer traffic at dealerships is down as the industry copes with the knock-on effects of the Cash For Clunkers scheme.  Edmunds is however expecting new car sales to pick up next month.

 If you want the biggest bang for your buck, look into quality used cars sold in different places.  One of the best ways to go right now for cheap cars that are of a high quality is to look into used trucks and SUVs.  While gas prices were high last summer and into early this year, many SUV and truck owners unceremoniously dumped these inefficient gas guzzlers.  Now that gas prices have receded a bit, it’s time to re-evaluate the good points of SUVs and trucks, especially if they are discount cars.

 Back to ownership costs, purchasing new vehicles as opposed to three-year-old pre-owned cars results in a cost difference of literally thousands of dollars.  The October 2008 Consumer Reports magazine listed an impressive statistic.  The difference in ownership costs for five years of a 2006 Ford Escort sedan when compared to a 2009 of the same model came to over $8,000.  A full-size 2006 Chevrolet Tahoe could be owned and operated at $25,500 less than the 2009 model brand new off the lot!  If gas is your biggest concern when calculating cost of owning a vehicle, you are sorely mistaken.  Cheap cars that are still reliable, but a few years old, will save you thousands in ownership costs, even if they use a little more gas.

 So what are the best deals out there on quality used cars?  There is no standard “sticker price” on pre-owned cars, trucks and SUVs, so the forces of supply and demand tend to be the biggest determiners of the price of discount cars.  Gas prices are also a big factor.  It is has been estimated that for each single dollar increase in gas per gallon, the value of pickups decline by $2,200.  On the other hand, compact cars increase in resale price by nearly $1,000.  Apparently it can be said that the price Americans pay at the pump seems more relevant than depreciation and cost of ownership.  Cheap cars can be great to own, even if they use a little more gas, because $20 more a month on gas is significantly less than thousands of dollars over a period of five years for owning a new car.

 Right now, the way to buy any vehicle—cars, trucks, SUVs, mini vans—is through government and police auctions.  There is absolutely no way to strike a better deal on quality used cars than through this method.  Discount cars abound at these auctions!  The vehicles that are sold may be cheap cars in price, but not in quality.  Learn about auctions in your area to take advantage of great savings on pre-owned cars!