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High New, Used Car Prices Keeping Pedal to Metal

As 2021 drew to a close, vehicle valuation and automotive research company Kelly Blue Book (KBB) released the startling stat that the “average used car price tops $27,000 for the first time,” noting that this base price is “a jaw-dropping 41% higher than in November of 2019, the last month before COVID-19 was first detected and knocked the world’s economy off its tracks.” 

KBB competitor Edmunds.com placed the average used car slightly higher at just over $29,000. 

Car shoppers — new or used — and those fixing wheels they already own should put some padding under their jaws because they will likely continue dropping throughout 2022. 

Among the hardest hit by COVID-19 lockdowns, microchip shortages and supply chain slowdowns, the automotive industry needs a lift, with inventories radically depleted and uncertainty ahead. 

There are essentially two schools of thought as to what happens over the next six months.  

Optimists believe

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Twin Cities car market battles empty lots, high prices, waits

Jim Palusky wasn’t planning on shopping for a car this fall, but then he got an offer he couldn’t refuse.

Walser Toyota in Bloomington said it would buy his 2019 Tacoma pickup for just $1,500 less than he paid for it, even though he’d driven it more than 30,000 miles in a year and a half.

“I couldn’t believe it was for real,” said Palusky, a retiree from Maple Lake who makes frequent trips to Duluth. “Everybody I talked to said I was crazy not to trade up.”

While other segments of the economy are still trying to recover from the pandemic, the auto market is reaching new heights. With manufacturers unable to ship enough new vehicles due to parts shortages, prices for new and used vehicles are skyrocketing. Some customers making trades are even getting more than they originally paid.

Walser Toyota is one of those dealerships scrambling for

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Used car prices hit record high in September

Car prices concept with toy car and money roll on roof
Photo (c) CatLane – Getty Images

Consumers shopping for a used car last month encountered record high prices, according to the latest Manheim Market Report (MMR). Used car values increased each week throughout September. 

Three-year-old vehicles — typically the cars and trucks that are most in-demand — increased in value by 4.6%. Throughout the entire month, buyers paid more than the MMR values. Despite there being higher prices, 65% of shoppers ended up buying a vehicle, compared to 52% in 2019.

Every type of vehicle saw price increases in September, but some increased more than others. The price of a van rose nearly 41% from September 2020. Pickup trucks, already among the most expensive used vehicles, rose by another 17.8%. Overall, prices were up 27.1%.

Like many segments of the economy, supply chain issues have reduced automotive inventories and led to higher prices. Since early in the pandemic, there has

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INDIANA IN-DEPTH: Chip shortage puts news, used vehicles in high demand | Across Indiana

Currently in the market for a new or used car? If so, be prepared for some sticker shock, at least for the foreseeable future.

According to the analysts at automotive resource company Edmunds, new car inventories have been strained for months due primarily to a combination of global semiconductor chip shortages and supply chain disruptions connected to the COVID-19 pandemic.

After digging into the potential impacts of those factors, the company recently reported that new vehicle inventory at dealerships nationwide was down by 48% this spring compared to a year ago, with inventories continuing to fall in the summer. And while the company does predict that new car inventories will begin to steadily rebuild beginning in September, the anticipation is that inventories will remain well below their pre-pandemic levels through 2022.

“New vehicles — particularly new trucks and SUVs — are basically the 2021 equivalent of toilet paper and hand

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