Why Used-Car Prices Are Through The Roof

Plus: Why That’s Great for CarMax 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. JULY 2, 2021 [View in browser]( HOW TO PROTECT AND GROW YOUR BUSINESS AND INVESTMENTS NOW If you’ve shopped for a new car recently, you know they’re expensive. But you might not know that used-car prices are also through the roof. According to [Edmunds.com]( the average price of a used car sold in the second quarter of 2021 was $25,410. That’s the highest level on record in Edmunds’ data. As recently as the fourth quarter of 2020, the average used-vehicle price was slightly under $21,000. Inventory of new cars is extremely tight, pushing many shoppers to buy used, while driving up used-car prices to “astronomical levels,” says Jessica Caldwell, executive director of insights at Edmunds. --------------------------------------------------------------- SPONSORED CONTENT FROM VANGUARD PERSONAL ADVISOR [Plan Your Retirement Income with Vanguard]( At Vanguard, we're invested in you. Which is precisely why we've created Vanguard Personal Advisor Services®, providing remote access to expert financial advisors, real-time goal tracking, and more confidence you'll meet your goals. There's never been a more perfect time to get started. [READ MORE]( --------------------------------------------------------------- The good news for car shoppers is that if they are trading in a vehicle, their trade will bring top dollar, too. “Although it’s important to do your research on available incentives, getting competitive quotes for your trade-in will be the smartest way to guarantee the biggest discount on your next vehicle,” says Ivan Drury, another analyst at Edmunds. (For more on buying a used car in the current market, see the latest [episode]( of Kiplinger’s podcast, Your Money’s Worth.) High used-car prices are great for CarMax ([KMX]( too. Shares of the used-car dealer have surged 38% year-to-date, with tight auto inventory bolstering sales. In its recently reported first quarter of fiscal 2022, CarMax’s Sales Operation segment’s retail used unit sales were double Q1 2021 and 21% higher than in Q1 2020, thanks to an 11% jump in average selling price to $22,500. But a bullish analyst consensus -- 11 Buys versus four Holds and one Sell, according to S&P Global Market Intelligence -- isn’t just about used-car sales. It’s about tech. “[Carmax] is in a unique position to disrupt the wholesale used car market through an online instant appraisal tool,” says Baird analyst Craig Kennison, who rates the stock at Outperform (equivalent of Buy). “During the quarter, CarMax purchased a stunning 341,275 vehicles from consumers (+236% vs. 2020 and +77% vs. 2019). These direct-sourced vehicles are among the most profitable CarMax sells.” Free download, [The Kiplinger Letter's Forecast](. No information required from you. SPONSORED CONTENT FROM SMARTASSET [7 Secrets People Who Retire Comfortably Know About Financial Advisors]( Working with a financial advisor is a crucial part of any retirement plan. Knowing these 7 secrets can help you avoid years of stress. [READ MORE]( RELATED LINKS [7 Sizzling Semiconductor Stocks to Consider Investing In]( [14 Best Infrastructure Stocks for Biden's Big Building Spend]( [Why the Bitcoin Craze Is Just Another Fad]( [10 States With the Lowest Gas Taxes]( [Build a Better Portfolio in 2021 -- Sign Up for Kiplinger's Free Investing E-Newsletters]( [Kiplinger] [Facebook]( [Twitter]( [LinkedIn]( Send this to a friend. [Click here.]( All content ©2021 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](.