Couldn’t this be a simple case of supply and demand?  We’re in an economic downturn and the majority of Americans live in areas where a car is mandatory to function.  As Americans exercise frugality while replacing a necessity, might they not just be increasing the demand for used cars in the same way store brand groceries have experienced much higher sales?  Even at 10-30% higher, they’re still cheaper than new cars.

Another reader:

Cash for Clunkers took a total of 680,000 cars off the market, while total used car sales are around 12 million annually in the U.S.  In other words, it took somewhere around 6% of the pool out of circulation (again, a year ago).  This is not that much.]]>