New cars sales saw a significant spike in July as shoppers were drawn to dealerships by deep year-end discounts and the Car Allowance Rebate System (CARS) program, popularly known as cash for clunkers. However, used-car sales are expected to dominate in August, according to the latest Consumer Reports Index.

A new monthly economic survey, the index tracks U.S. consumers’ personal financial experiences, attitudes, and activities. It is comprised of five key indices: the Sentiment Index, the Trouble Tracker Index, Stress Index, the Retail Index, and the Employment Index. (See the full report “Consumers aren't so upbeat, new Consumer Reports Index shows.”)

This month consumers are feeling less well off then they were several months ago, and this is influencing their purchasing behavior. Lower-income households, earning less than $50,000 a year, have been disproportionately affected by the economy.

Among recent interviewees, 3.2 percent plan to purchase a used car in the next 30 days, compared to 1.8 percent intending to buy a new car. In July, the responses were 4.1 percent new and 3.8 percent used signaling a significant change for the weeks ahead.

As the end of summer fast approaches, there are traditional close-out deals on 2009-model-year vehicles, however there are far fewer fuel-efficient models from which to choose compared to just a couple weeks ago. Those shoppers looking for low-cost transportation are being driven to the used market, where you can traditionally buy more car for your money and right now, there is greater selection.

The Consumer Reports Index is based on a nationally representative random probability sample of U.S. telephone households. The August ‘09 index is based on a total of 1,009 interviews, was completed between July 30 and August 2, 2009.

—Jeff Bartlett with the Consumer Reports National Research Center