Consumers taking advantage of cut-rate financing for new cars have dumped huge numbers of used cars on the market this year.

The lower-cost financing also has cut demand for used cars by making new cars easier to afford.

As a result, enough "previously owned" vehicles are sitting on auto sales lots across the country to drive down their prices.

Used-car sales normally are slow in December, when consumers focus their attention on Christmas, but today's overabundance of old metal is making things much worse.

For example, the average retail value of a three-year-old used car in the Washington metropolitan area was about $5,400 last summer. But as things stand now, a buyer could expect to knock as much as $800 -- or about 15 percent -- off that price, some area dealers and auto industry officials said.

"The market is a lot softer this December than it is normally at this time," said John Proudfoot, used-car sales manager at Ourisman Chevrolet Co. Inc. in Marlow Heights.

The cut-rate-finance campaigns "just drained the market" of used-car buyers. "But it's hurt new-car sales as well" by pulling buyers away from the 1986 models, Proudfoot said.

Depending on the condition of the vehicle and the time (hour, day or week) of sale, "A used car that was worth $5,000 in September could be worth $4,000 now," Proudfoot said. "I've got a very good inventory of used cars. . . . We're making deals that we've never made before."

A look at the National Automobile Dealers Association Official Used-Car Guide gives some idea of what is going on. But, here, numerous caveats are in order. For example, a 1982 car that was three years old in August 1985 is regarded in the auto industry as a four-year-old car in December. The reason? The model year changed in October.

Age in the used-car business reduces a car's value almost as much as mileage, said Jan Ocean, assistant editor of the NADA used-car guide. The cleanliness, mechanical condition, and the time and region of sale also affect a used car's value, Ocean said.

Also, there is this: Retail value is a suggestion of a car's worth. Price is what the seller and buyer actually agree on, and the two aren't necessarily the same.

With those qualifications, take a look at what has happened to the average retail values of a 1982 eight-cylinder Chevrolet Caprice Classic and a 1982 four-cylinder Dodge Aries Custom sedan. The Caprice is a full-size car and the Aries is a compact. Both cars are "fully loaded," which means they are equipped with automatic transmissions, air conditioners and other options.

In August 1984, the Caprice had an average retail value of $7,525. That slipped to $7,350 in December 1984, according to the NADA guide. In August 1985, that same Caprice carried an average retail value of $6,500. That fell to $6,125 this month, the guide said.

By comparison, the 1982 Aries had an average retail value of $5,575 in August 1984; and that fell to $5,225 in December of the same year. The 1982 Aries had an average retail value of $4,475 in August 1985 and $4,125 this month.

Ocean said that some of the effects of cut-rate new-car financing are reflected in those price changes. But how much of an effect, in terms of specific dollar amounts, is uncertain, he said.

The new-car sales incentive campaigns and the decline in used-car prices also are hurting rental-car companies, which need to turn over their fleets regularly to keep them new.

Hertz Corp., regarded by industry analysts as the largest purveyor of used cars in the United States, dropped its average used-car price by 12 1/2 percent over the last two months. Hertz also is considering offering a "free-finance period" to used-car buyers. A "free-finance period" means that the buyer takes possession of the vehicle, but makes no payment on the finance note for a specified period, usually two or three months.

"Things have gone diabolically bad" in used-car sales, said Colin Selgate, a Hertz vice president in charge of fleet operations and sales. "It's a pity that used cars are not like red wine. That way, we could put them away during the winter and bring them out in the spring."

Hertz disposes of its used cars on 105 lots around the country, Selgate said. Carrying a huge used-car inventory adds to the operating costs of car rental firms and cuts into their profits. Most of those cars are nine to 18 months old with 15,000 to 30,000 miles on the odometer, he said.

"We are in a service industry. We are not a car company. Our rental customers expect to get into new cars, and we intend to put them into them," Selgate said. "We can't afford to have 40,000-mile units running around."

In 1984, according to the Detroit-based Motor Vehicle Manufacturers Association of the United States Inc., the average age of a car on the American road was 7.5 years -- the highest since 1950, when the average age was 7.8 years.

Many of those older cars, held by individual owners through the depths of the recent recession, were unloaded between mid-August and the first week of October this year, when all American car companies and some of their foreign competitors offered under-8-percent financing rates.

General Motors Corp. started the cut-rate war ostensibly to clear out a backlog of 1985 models left over by a lengthy car-haulers' strike last summer. GM's U.S. rivals were forced to offer similar rates to protect their shares of the domestic auto market.

GM, Ford Motor Co., Chrysler Corp. and American Motors Corp. now are offering new rounds of sales incentives on certain models. Although all but Chrysler's are scheduled to end early next year, many auto industry analysts expect manufacturers to keep the programs throughout the 1986 model year in their quest for increased new-car market share.

That bodes ill for the used-car retail industry, according to Selgate and Dennis Virag, vice president and director of automotive industry analysis for Detroit-based Ward's Automotive Research.

"Used-car sales are declining. There is a glut of used cars on the market" that probably will not be absorbed until the end of the first quarter of 1986, if then, Virag said.

But he said that it is difficult to put an exact number on what constitutes the "glut," because most used-car dealerships are privately held operations that rarely report their unit sales.

However, "days' supplies" figures provided by the McLean-based National Automobile Dealers Association, which represents most of the nation's franchised auto dealers, are one indication. New-car dealers with complementary used-car operations usually consider a 35- to 40-day supply of used cars "safe" or "normal," said Thomas Webb, NADA's senior economist. By the end of September, when the under-8-percent finance campaigns were winding down, the franchised dealers were reporting used-car supplies "of around 50 days," Webb said.

"But that bulge shouldn't last too long. The dealers, rather than hold on to those cars too long, will get rid of them wholesale at auctions," Webb said.

Ron Smith, acting executive vice president of the National Independent Automobile Dealers Association in Raleigh, N.C., agreed with Webb's assessment. NIADA represents 12,000 independent used-car dealers.

"We've seen this kind of thing happen time and time again. The manufacturers reap the benefit of their sales incentive programs at the expense of the used-car dealer," Smith said. "The buy-down on interest rates has caused some of our people to scramble, but they'll be back on top soon."

Even if the used-car dealers survive the current glut, some Wall Street analysts are predicting that the future influx of under-$5,000 new cars -- such as the Yugo, which is built in Yugoslavia -- will do long-term damage to the used-car market.

Smith said that the problem with the analysts is that they never have sold used cars. "Those economy cars are mostly subcompacts, and not everybody buying a used car wants a subcompact," he said. "Besides, the Yugos will get old, and we'll sell them again, too."

Indeed, the Yugo and similar cars may help to increase used-car sales, according to Virag.

"Some dealers are using the low-priced economy car as a lure" to get buyers into used cars, he said. "People come into the showroom to look at something like the Yugo. And then the dealer starts 'trading them up' to a bigger used car at about the same price."

Said Smith: "Used-car dealers really know how to get back on top of the ball."