Photo by Bill Green Robert Cox, president of Fredericktowne Motors on West Patrick Street, specializes in used cars, especially Hondas.
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"I had one place laugh me out the door recently when I offered $5,000," Rozof said. "The prices for used cars are completely outlandish." Even older cars with cassette players are priced well over their blue book value, the Germantown resident said.

Older vehicles priced between $3,000 and $5,000 a year or two ago are now selling for between $7,000 and $10,000, said Robert Cox, president of Fredericktowne Motors on West Patrick Street.

"I still have people asking for $3,000, $4,000 and $5,000 cars, and they don't exist," said Cox, who specializes in used Hondas and trucks. "The new paradigm is $10,000. Anything under $10,000 is considered an inexpensive car."

Low supply and high demand, a flat economy and a rush to trade in larger vehicles that consume a lot of gas for smaller ones are all reasons for the shortage of used cars, several local dealers said.

Too many people are chasing the same products, Cox said.

The industry has been abuzz about the shortage of used cars but there is also a shortage of new cars, said Paul Adams, general manager of Frederick Motor Co. on Waverley Drive.

A supply of used cars comes from new cars, Adams said.

The automobile industry is forecast to produce 12 million units this year. That number is down from the 16 million vehicles the industry was selling three years ago, which in turn reduces the number of vehicles that are traded, Adams said.

"That's 4 million vehicles that are not coming back into the market as used cars," Adams said.

Factories once produced as many vehicles as they could and tried to sell them later. As a result of a lackluster economy, Adams said that's not how automakers operate anymore.

The tsunami in Japan earlier this year not only closed factories but also put a strain on supplies.

"When demand is up and inventory is down, that drives prices up," Cox said. "If you're not manufacturing new cars, those cars can't work their way through the system to become used cars two or three years later."

Discounts on Hondas and anything with a four-cylinder engine are hard to come by, Cox said.

The nation's Cash for Clunkers program took almost 1 million vehicles off the road. People who got $3,500 for the cars they turned in would probably get $5,000 to $7,000 for the same trade today, Cox said.

Auctioneers are also having trouble securing good used cars.

"Anything clean brings in a lot of money, but there's not too many out there," said Marty Lookingbill, owner of Gettysburg Auto Auction. "The price(s) of clean, low-mileage cars are through the roof. When people trade in their cars today, they are trading it in because they have to."

The Cash for Clunkers program was an example of government shortsightedness, which contributed to the lack of used cars on the market today, Lookingbill said.

The 800,000 vehicles that were junked through the clunkers program would have been sold three to five times for a total of 3 million sales, Lookingbill said. The number of available older cars on the market used to peak at about 20 million, but the number is nowhere near that today, Lookingbill said.

In addition, the lack of vehicles coming from Japan has prompted some new dealers to buy used cars to keep inventory up, which exacerbates the problem, Lookingbill said.

Fredericktowne Motors is getting a lot of trade-ins on trucks because of the high cost of gasoline. Cox said a customer who was commuting to Baltimore in a truck was spending $150 a week on gas.

"So at that level of spending for gas, she could make a new car payment and still save $600 to $700 a month," Cox said.

Cox predicted gas prices will top $5 a gallon in five years unless attitudes change and politicians muster the will to develop alternative energy.

The country's 100-year supply of natural gas looks like the best solution for the short term, Cox said.

"We have to develop all alternative energies. Our engineers have finally begun milking better gas mileage out of cars," Cox said. "We need attitude changes and the political will to make those changes."