What's Driving Used-Car Prices Higher

Plus: An ETF Boom and Bust You are receiving this limited-time email resource as a subscriber to Kiplinger's free e-newsletters. To unsubscribe at any time, simply click the link in the footer below. SEPTEMBER 25, 2020 [View in browser]( HOW TO PROTECT AND GROW YOUR BUSINESS AND INVESTMENTS NOW It may sound odd, but the used-car market is on fire these days. Used-car prices are up 23% from a year ago, while SUVs and trucks are up 17%. Demand shot up because so many consumers have switched from public transportation, ride-sharing, trains and planes to personal vehicles to avoid exposure to the COVID-19 virus. Government stimulus checks and the inability to spend much money on things like dining out have also goosed vehicle spending. --------------------------------------------------------------- SPONSORED CONTENT FROM SMARTASSET [7 Mistakes Everyone Makes When Hiring A Financial Advisor]( Working with a financial advisor is a crucial part of any retirement plan, but most people make these avoidable mistakes when hiring one. [READ MORE]( --------------------------------------------------------------- Prices of used cars have climbed more than trucks and SUVs because they tend to be cheaper, and it has primarily been low-income workers who have either lost jobs or had their hours reduced. Also, inventories of used cars were very low to begin with, since only one in four new vehicles sold is a car these days. Most folks who are buying new are buying pickups and SUVs. The high prices have been a boon to auto dealers, who have been calling past customers and sending out mailers seeking trade-ins to increase their inventory of used vehicles, as well as to sell new vehicles. The strong demand will likely last until a viable vaccine gets widely distributed and the public's health fears subside. When that happens, used prices may slide again. And it appears that prices may have already peaked; weekly transaction data show them edging down slightly since mid-August. But for now, they'll remain elevated. So, if you're thinking about buying a new ride and trading in your current car, you should have some bargaining power. Here's an odd quirk of the ETF industry this year: Exchange-traded funds are shutting down at a record pace. Yet the ones that remain are pulling in cash at a record pace, too. According to this week’s forthcoming issue of The Kiplinger Letter, more than 170 ETFs have closed so far this year, compared with 125 last year. It seems likely that closures will eclipse the record of 186 set in 2018. What's going on? It appears that investors are losing their appetite for the small, niche ETFs that flourished not long ago. Meanwhile, they have dumped $332.5 billion into larger ETFs so far this year, up from $326 billion for all of last year. It helps that the Federal Reserve has been buying bond ETFs as part of its broader asset purchases to support the economy -- $8.7 billion since May. But mostly, it appears that investors are focusing their cash on a smaller number of giant ETFs as an efficient way to get exposure to the stock market. Free download, [The Kiplinger Letter's Forecast](. No information required from you. SPONSORED CONTENT FROM SMARTASSET [Find the Right Financial Advisor for You]( Ready to kick your retirement plan into high gear? Compare fiduciary financial advisors in your area. [READ MORE]( RELATED LINKS [Get Your Car on the Cheap]( [The Safest Used Cars for $20,000 or Less]( [Kip ETF 20: The Best Cheap ETFs You Can Buy]( [Trump Promises $200 Prescription Drug Card for Seniors]( [Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check]( [Kiplinger] [Facebook]( [Twitter]( [LinkedIn]( Send this to a friend. [Click here.]( All content ©2020 The Kiplinger Washington Editors 1100 13th Street, NW, Suite 1000 Washington, D.C. 20005 Thank you for subscribing to Kiplinger's A Step Ahead, a free resource to help readers navigate the economic recovery from COVID-19. If you ever wish to stop receiving this service, please [click here to unsubscribe](.