Used-car prices surge due to global chip shortages
The average used vehicle is now worth $17,609, according to Manheim's Used Vehicle Value Index. Pickup trucks, in particular, are fetching much higher prices than they were worth just a few months ago.
Why it matters: The supply-and-demand dynamics are unlikely to change soon. The chip shortage is ongoing and has caused Ford, the maker of the best-selling vehicle in America, to cut its Q2 production by 50%.
Between the lines: Trade-ins are now becoming very difficult. Normally, dealers buy an old vehicle at a discount to what it's worth and hope to sell it at a profit.
- Now, they need to worry that the whole market will crash from its current frothy highs.