Shopping for a Used Car? Prepare for Sticker Shock

Number of the Day: The most relevant or interesting figure in personal finance

NOTD - $2,433

That’s how much the average price of a used vehicle has risen since March, a 10.6% increase, as the shrinking inventory of new cars forces auto shoppers to search for alternatives.

Buyers paid an average of $25,410 for a used car or truck in the second quarter (between April and June), according to Edmunds—the highest price since the car-shopping website started keeping data. The second-quarter figure is up from an average of $22,977 in the first quarter and $20,942 a year ago.

A lack of parts and components like semiconductors has limited the number of new cars automakers can produce, which has caused shutdowns at some factories in recent months. Fewer cars mean less inventory on car lots, pushing up prices for the new vehicles that do get made. Customers looking for a better deal have turned to used vehicles—increased demand that has caused the cost of used cars to soar, as well.

"Car shoppers are used to getting deals, and often far below the sticker price for new, so anyone returning to the car market for the first time in a while is in for some serious sticker shock,” said Jessica Caldwell, Edmunds' executive director of insights.

During the last two months, skyrocketing used-vehicle prices have powered much of the overall rise in the Consumer Price Index, which tracks the changes in what we pay for things. At the same time, consumers might be able to cash in on the red-hot auto market, with dealers paying top dollar for trade-ins to keep their lots stocked.

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