Many people assume that the trend to watch in the coming months and year will be in the new car market. After all, many car manufacturers are promising great rates, employee pricing, and low prices. While all the marketing hype may seem exciting, CreditIQ.com, a company which processes credit applications for cars, says that the real trend to watch is in the used car market. In fact, employee pricing means that more people are buying new – and experiencing the higher costs and depreciation that comes with buying a new vehicle – which means more previously-owned cars on the market now and in the near future. The current $350 billion U.S. used car market may grow to even higher proportions in years to come.

One key trend that is likely to occur in the coming months is a real dealer hunger for used cars. In the two and a half decades that the National Automobile Dealers Association (NADA) has compiled statistics about how much profits dealers can stand to make over new and used cars, the gap between new and used has never been wider. Used cars make dealers far more than new cars, which means that dealers selling new cars try to push many “extras” to make up the difference while dealers selling used are now offering better deals to sellers than ever before. Plus, the situation is only likely to accelerate due to the flagging housing and credit markets, which will push customers to seek quality newer model pre-owned cars rather than try to qualify for financing on a new car.

Since the start of the 2000s, the average price of a new car has moved up only 3% to around $28,500, reports NADA, and now improved car sales may make the used car market even hotter.

One key trend that car buyers will want to be aware of is that experts predict a large number of flood-damaged cars to show up in the used car market. Recent flooding in Western Washington and even some left-over cars from previous floods have meant that some unscrupulous sellers will try to sell these vehicles. Plus, this past harsh winter will likely create some very damaged used cars which should have flags on the title but which might be sold out of state to hide the evidence. Buyers should be aware of this trend and only buy from used car retailers who are trustworthy. Consumers can also protect themselves in the used car market by getting a mechanic to check the vehicle and by checking the vehicle’s “VIN” number.

Another key trend in the used car market appears to be the Internet. A recent study reported that while in 2002 shoppers looking for a pre-owner vehicle spend 4.8 hours researching and shopping online, in 2003, the number of hours had jumped to 5.5. Plus, 47% of used car buyers use the Internet to compare and find car deals, according to researchers. And the savvy shoppers seem to focus on independent sites rather than on manufacturer or dealer web sites. The overall trend here is that shoppers use the Internet to pinpoint the best of the best deals when shopping for a used car, and it appears that buyers are becoming more picky and web-savvy as the years go by.

With new cars exuding that new-car smell and prestige galore, why would anyone buy a used car? After all, when a person imagines winning the lottery, one of the first purchases they imagine making is that shiny new car. While car dealership spend a lot of effort and money convincing you to buy new, though, savvy car buyers know that buying used cars is a smart move because:

1) It’s what millionaires do. While you might see celebrities buying shiny new cars regularly, most millionaires actually drive around in used cars. Research has proven it – when you look at most people who are worth $1 million or more in assets, most simply do not put a big chunk of change into their vehicles and instead put their money into investments and into building a lifestyle they want. Quite simply, new cars can bleed your wallet when your money could be used to make your life better.

2) Used cars make sense when you consider depreciation. The minute you drive a new car off the lot, it loses value – in some cases, it becomes thousands of dollars less valuable. And that’s only in the first day! Used cars just don’t lose value as quickly.

3) Used vehicles don’t put you in a strange situation in terms of your car insurance. Not only will you generally pay much more in premiums for a new car, but if you are in an accident shortly after buying your new car, you could actually see your insurance rates soar even higher, meaning that you pay more in insurance than is worth it. New cars are simply a bigger risk and insurance companies remind you of that each time you have to pay a premium.

4) Used cars are a lot less hassle. Do you know what happens when city workers put down a fresh coat of asphalt on a sidewalk on a summer day? In most municipalities, they need to pay workers to sit by the slab while the asphalt dries, since the wet cement is a magnet to youngsters who want to draw in the wet cement. Well, new cars are the same way, attracting youngsters who want to joyride or just scrape your paint job. Do you really want to worry about your car every time you park it? It makes much more sense to buy a functional new car that you can use without worrying about every scratch. With a used vehicle, you can enjoy driving and you can reduce your stress as well. Plus, used cars are less likely to be affected by recalls than new cars.

5) Lots of choice and great prices. The used-car market saw over 42.5 million sales in 2006, reports CNW Marketing Research. This means a range of choices but also a buyer’s market. Since cars last longer today and there are so many cars on the market, prices are great. And, of course, used cars cost a fraction of the cost of new cars in comparable models.