Pre-owned car sales rise 10 percent over 2008 as credit begins to loosen, but buyers look to affordability.

Used-car sales took a leap upward in April, and the trend is expected to continue at least until midyear as pent-up demand for affordable pre-owned vehicles jacks up at least one segment of the car marketplace.

Sales of new cars continued an unabated slide toward what analysts say is a 30-year low in the United States, but used-car sales showed strength as buyers unable to finance new cars shifted their sights to less expensive used models. As a result, retailers such as the large Penske Automotive Group reported that despite an overall decline in sales in the first three months of 2009, improving used-car sales kept them in the black.

Loosening credit for used vehicles, combined with the public perception that loans for new vehicles remain tight, has fueled a spike in used-car sales, said analyst Art Spinella of CNW Marketing Research. CNW, which tracks new- and used-car sales, projects that new-car sales will top out at 10.1 million this year, while used-car sales are expected to jump to 40 million, a 10 percent increase over a credit-crunched 2008.

Thanks to lower overall demand for cars, so far in 2009, bargain prices for used models also have lured buyers. Those bargains began to dry up in April as buyers returned to the pre-owned market and transaction prices increased, according to CNW’s data. At the wholesale level, the market’s move toward used vehicles has been pushing up prices each month since last October, though overall prices are still down from earlier in 2008.

Besides growing demand, used cars are now in tighter supply because of reduced trade-ins, a reduction that correlates closely in number with the drop in new-car sales. Trade-ins typically account for more than half of used-car inventories. Some of that lack of supply is expected to be offset by the prospect of 2.6 million vehicles coming off lease and flooding the market in 2009 — up more than 8 percent from 2008.

What’s next? Analysts say a strong used-car market could be a harbinger of improved new-car sales by midsummer, because as the used-car market tightens on growing demand, prices eventually will reach a level at which many buyers decide to step up to a new vehicle. If Internet trends are any indication, many of those buyers may be seeking domestic models, considering that Detroit Three vehicles made up the majority of the most-searched-for brands in April on the popular used-car Web site Autotrader.com.

Pressure on the late-model used-car market likely will abate once the so-called cash-for-guzzlers legislation becomes law. The federal measure is expected to pay up to $4,500 to consumers who give up their less efficient older vehicles and replace them with new vehicles with higher fuel economy.

Experts say the net effect will be to drive down demand for late-model used cars, in much the same way that new-car incentives push buyers into new cars over similarly priced late-model used ones.

Conversely, anyone looking for a good eight-to-10-year-old gas guzzler might want to get cracking before a million or so of those vehicles get sent to the crusher.

By Bob Gritzinger of AutoWeek

Saving money does not mean you have to sacrifice performance. Here are some rides that are both sporty and relatively cost-effective.

By Lawrence Ulrich of MSN Autos

Forget casinos, glitz and go-go development. For Las Vegas, ghostly construction cranes perched above stalled, half-finished condos and hotels are suddenly the city’s most breathtaking sight. In tune with the nation, money, buyers and credit have dried up like an ice-cold roulette table.

That made Sin City a fitting backdrop to Nissan’s launch of the 370Z. Ever since the Datsun 240Z arrived here in 1969, bearing stylish fun on a $3,500 platter, the Z has been a sports car for people with real jobs, bills and budgets.

Starting at $30,665, the 370Z’s price may have grown nearly tenfold over the car’s six generations. But its reputation as a poor man’s Porsche is safe, thanks to an enlarged 3.7-liter V6 with 332 horsepower to nearly match the 345 horses of the latest 911 — for $45,000 less than the entry-level Porsche.

It all makes the Z one of the fastest routes to affordable fun. It’s a car that can zip away from recession headlines and workplace anxieties without running smack into a $1,200 monthly payment. If that formula appeals to you, then here are a bunch of fast, frugal machines to keep top of mind when considering a budget blaster.

Chevrolet Cobalt SS

It’s easy to look past the Cobalt’s vanilla styling — and harder to overlook its dime-store interior. But peel back the plain wrapper for the treat inside: a hard-charging, slick-steering sedan with 260 turbocharged horsepower, at a base price of just $24,095.

Volkswagen GTI

There are faster cars than the V-Dubya for less than $30,000, but none that deliver this much German refinement, road feel and pure driving thrills. Sharing its brilliant 2.0-liter turbocharged engine with VWs and Audis that cost $40,000 and more, this original hot hatch also offers a practical choice of 2-door and 4-door body styles.

MAZDASPEED3

Mash the gas and hold on tight: Mazda’s turbo terror explodes to 60 mph in just 5.5 seconds, quicker than many sports cars, and tops out at an improbable 155 mph. Compared to the basic Mazda3 hatch, this 263-horsepower version is a noisy, high-strung beast. It’s also a ridiculous bargain at barely 23 grand to start.

MINI Cooper

Compared to other pint-sized players, the BMW-designed MINI is no bargain, with prices that zoom past $30,000 for convertibles or well-stuffed turbocharged versions. But go easy on the pricey options and the MINI’s smiles-per-dollar quotient shoots through the roof. This little charmer is still one of the best machines around for slicing urban traffic or carving up the nearest canyon.

Subaru WRX

“So sue us.” That’s about all Subaru could say to buyers of last year’s 2008 WRX. Just one year after redesigning its 4-door rally monkey, Subaru has lavishly upgraded it with 41 more horsepower (for a total of 265) and a dramatically sportier suspension — while adding virtually nothing to the base price, a mere $25,660. The Subie now blasts from zero to 60 mph in about 4.7 seconds, quicker than the STI version that costs about $9,000 more. Call it an all-wheel-drive steal.

Speaking of true steals, we inevitably return to the new 370Z. As one might expect at this depressing moment in auto history, sports car sales have fallen faster than the industry at large. Yet Nissan product planner Peter Bedrosian still expects the Nissan to grab a hefty share of the smaller market.

“Everybody is motivated by the latest and greatest in sports cars,” he says.

From our point of view, the Nissan clearly qualifies as latest and greatest, despite the chilly sales climate. Compared to the Mazda RX-8, its traditional rival, the Nissan’s lusty V6 makes the Mazda’s torque-deprived rotary engine seem even more out of its league. A Mitsubishi Evolution might be a touch faster and offers a back seat, yet it’s still an econobox at heart, an adolescent boy racer aimed at guys who think a sideways baseball cap is a fashion statement. In contrast, the Nissan Z is a genuine sports car, more grown-up and — it must be said — appealing to the opposite sex.

Ultimately, the Nissan 370Z offers as much performance and sex appeal as you’re going to find for less than 40 grand. For people who can still splurge on a sports car, the new Z is the perfect two-seater for hard times.