As Dan mentioned used car sales are down 6% in the first quarter of 2013. This is not good news for dealers. As we learned from our visit to the Valley Honda dealership used cars have higher profit margins than used cars due to asymmetric information. Its easy for a consumer to go out and compare new cars and not so easy to compare and evaluate used cars. Coupled with this the U.S. GDP is up 2.5% for the first quarter of 2013. While I wasn’t able to find any data on the proportion of used to new car sales as effected by GDP growth I would imagine during times of economic expansion new car sales would go up, both the overall number of cars sold and the percent of cars sold. Still I would expect used car sales to go up as well during an expansion. Of course that’s not to say that many other variables play apart in the sales. This post is more in search of an answer to how periods of economic expansion and recession correlate to used car sales.