As dealers, new and used, struggled to stay afloat after the recession hit in 2008, the past five years have been tumultuous. But, as the economy picks up, what’s in the cards for used-car dealers?

Industry research firm IBISWorld looks to answer that question with its new "Used Car Dealers in the U.S." industry report.

In its report, the company outlines what it expects will help used-car dealers “stay competitive and increase profitability” in the next five years.

In doing this, officials noted that the adoption of lease-here, buy-here financing options will aid dealerships, but the organization of the Consumer Financial Protection Bureau, as well as increased regulation, could put a damper on growth and potentially limit financing practices.

Furthermore, IBISWorld contends that used-car dealers will face increased competition from new-car dealers in the near future.

A Lingering Recession

Though used-car dealers may be facing growing competition from  new-car stores, dealerships that sell pre-owned vehicles may not be experiencing as many lingering effects from the 2008 economic downturn, according to IBISWorld.

While used stores “have a similar structure and are sensitive to some of the same factors that new-car dealers face, the industry weathered these challenges much better than other industries in the automotive sector,” says IBISWorld industry analyst Radia Amari.

The company also cited that buy-here, pay-here dealerships offering more options for independent financing solutions put used-car dealers ahead of the game during the past few years, making it easier to work with consumers reeling from the effects of the recession.

“Even customers with B-grade credit had difficulty finding affordable financing during the credit crisis,” Amari noted, and many turned to the BHPH market, rather than opting for traditional financing from new-car dealers.

‘Moderate Growth’

And though the company warns that growth within the used sector will be moderate in the coming years due in part to the imporiving state of new-car dealers and OEMs, officials noted that “relative economic stability is encouraging spending on used cars.”

And while over the five years leading to 2012, industry revenue has contracted at an annualized rate of 3.7 percent to $71.6 billion, in 2012, revenue is expected to grow about 1.2 percent, supported by financing revenue from credit-poor consumers, the company explained.

“Despite losses of customers to new-car dealers,” growth will most likely be a reality for the used-car market, the company shared.

“Used-car sales are expected to grow in 2012, and the U.S. economy will begin growing in earnest again in 2013,” officials noted.

“Because car sales typically move with the business cycle, car sales will also grow in earnest,” they concluded.

For more information, visit IBISWorld’s "Used Car Dealers in the U.S." industry report page.