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Used car prices are expensive in 2021 largely because of a shortage of new cars. Although used car auctions shut down a year ago due to the pandemic, strong demand has fueled extreme price increases on preowned cars & trucks.

According to shopping site Edmunds, the average transaction price for used cars reached $25,410 in the second quarter of 2021 (up from $20,942 just a year ago). In some cases, used car prices may actually exceed the MSRPs of new cars.

For example, iSeeCars says the average used price of a Kia Telluride is approximately 8% higher than a new one. The website recently reported that the average used Telluride costs $47,730, $3,564 more than a comparable new SUV.

As we noted this spring, high used car values may make it a great time to sell your car. However, just because you can get top-dollar for your car may not mean much since new car rebates are down because of a global chip shortage.

If you’re looking for a deal on a used car, consider a less-popular model. For example, we already know that used Toyota Tacoma pickup prices remain especially high. The situation may not be as dire on a truck model like the Ford Ranger.

It’s also worth noting that factory-certified pre-owned cars sometimes qualify for incentives. For example, Toyota’s used car interest rates are actually lower than those of its new cars, with deals like 1.99% APR on CPO RAV4 models.

Your priorities may dictate your ability to delay a purchase. Cox Automotive says wholesale prices (what dealers pay at auction) are on the decline, but how soon this translates to retail prices (the prices advertised) is an open question.

Limited supply may take away some of your negotiating power on a used car. There could still be deals, but they may be harder to find and require consumers to really do their homework and pounce if an opportunity to save presents itself.

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