If you’re thinking about purchasing a used car in the next few months, there may be good news for your wallet.

According to USA Today, used cars prices are expected to level off and possibly decline in 2010. In an analysis conducted by the National Automobile Dealers Association [NADA], new vehicle sales are expected rise 15 percent this year which could result in an increase in the number of trade-ins and the supply of used cars.

For the past two years, used car dealers have had about 8 million fewer used cars and trucks which drove prices of used vehicles up every month in 2009.

It’s a simple matter of economics. As an estimated additional 1.1 million used cars are added to the supply of used cars, prices are expected to decrease. But according to Paul Taylor, chief economist for the NADA , it will take several years before the supply returns to the 1998 – 2007 period when there was an excess supply of used cars.

From 1980 – 2007, used cars were profitable for dealers. However in 2008, when gas prices surged to record highs, dealerships saw an average net loss of $5 per used vehicle.

With the auto industry struggling to stay afloat, this decrease in used car prices just might be what they need. So if used car prices decrease, would you be willing to trade in or sell your current car for an upgrade?