Automakers have pulled back significantly on new-vehicle incentives in the last three years, and this has subsequently led to a nice lift in prices on the used-car side, says NADA Used Car Guide senior analyst Jonathan Banks in the latest entry to his Used Car & Truck Blog.

Citing numbers from Autodata Corp., Banks noted that average incentive spending per vehicle has dropped about 10 percent following the end of the recession in 2009.

More specifically, average incentive spending in 2009 was at $2,781 per vehicle. So far in 2012, it has averaged $2,493, nearly $300 less than the figure from three years ago.

“Multiply that by the number of units produced each year, and the savings quickly add up. In large part, these savings go right back into making better product,” Banks suggested. “This allows new-vehicle prices to increase and associated downward pressure on used prices is minimized.”

Of course, this downward track wasn’t always the case; and as a result, used-vehicle prices fell, Banks explained.

In fact, he noted that “excessive manufacturer subvention of new-vehicle prices was one of the most corrosive factors affecting used-vehicle prices for the majority of the last decade,” particularly for the Big 3.

 “The immense sums of cash spent on incentives and non-product development-related expenses meant that domestic models ultimately brought to market were at times at a competitive disadvantage to their import counterparts; this of course meant that additional subvention was necessary to encourage a retail purchase,” he noted.

That said, this “cycle” was eventually corrected, thanks in part to bankruptcy, reorganization and the aforementioned recession, Banks stressed, calling today’s production “more in line with demand” and lauding both the allure and quality of new product from recent years.

In fact, Banks mentioned that “the depth and breadth of product for each manufacturer has never been better.” And thanks to this correction, OEMs have been able to slow down the incentive spending, Banks said.

“So the market has progressively moved from a negative circular process to one that is decidedly more positive, and this change in course has been one of the more pronounced drivers behind the rise in used-vehicle prices over the past few years,” he stated.

“Incentive spending year-to-date combined with known production plans suggest that we’ll continue to go down this positive path over the near-term,” Banks added.

So far this year, incentive spending is down just 0.4 percent, but take that with a grain of salt. While it may not “sound like much” of a decline, automakers already pulled back on incentives greatly last year given the production challenges spurred on by the natural disasters, Banks noted.

Overall, incentive spending slowed from $2,706 per vehicle in 2010 to $2,529 in 2011.

In a recent look at incentive spending, Edmunds.com found through its True Cost of Incentives that the industry spent $2,227 per vehicle in September. This was a 3.1-percent month-over-month drop and a 9.3-percent year-over-year decline.

Over at TrueCar.com, analysts found that average incentive spending last month was at $2,468 per vehicle. This marked a 6.7-percent year-over-year dip and a 1.2-percent sequential slide. 

Meanwhile, Banks would go on to wrap up his blog entry by looking forward.

“As a collective, manufacturers need to continue to pull back on average incentive spending and control production in order to maintain higher values on the used-vehicle side,” he noted

Banks' complete blog entry can be read here.