As most of you are aware, the computer chip shortage has dramatically affected the car market. Demand for new cars exceeds their supply and that's driving up prices for both new cars and used cars. The Minneapolis StarTribune recently had an article about the car shortage - Empty lots, long waitlists, high prices: Twin Cities car market is at an extreme moment
My brother's family recently had first hand experience with this and I thought I would share their experience. Their Daughter #3, who turns 22 later this month and graduated from college last May, was in a fender bender earlier this month. No one was hurt, and while the other three cars could drive away, her car was totaled. A mere four days later their Daughter #2, age 23, had her car stolen. It was recovered, but spray painted inside and out, and with drug paraphernalia found in it and blood smeared in various places - a total loss.
My 22-year old niece had a 2004 Pontiac Vibe for which she paid $1,000 for it three years ago (family discount). The insurance company valued it at 3,300. The 23-year old niece had a 2009 (I think, maybe it was a 2007) Toyota Corolla. She bought it four years ago for about $5,500. The insurance company valued it at about $6,500. Isn't that remarkable?
My sister-in-law enjoys the challenge of used car shopping so she did all the research and found great used cars for her daughters. She discovered that prices are high and you have to act quickly because cars are quickly sold. While dealerships might take a down payment to hold a car that has just come in, they won't hold a car once it is cleaned up and on the lot, ready for sale.
The 22-year old bought a 2008 Toyota Highlander for $10K. I forget the mileage - maybe 170K? Anyway, my sister-in-law wrote a check for it and my niece will finance it through a local bank. The 23-year old bought a 2015 Suburu Outback for $18K. It had 130K miles on it. If my niece had financed it through the dealership, she would have paid about 11% interest.
Again, my sister-in-law wrote a check for it and that niece will also get a loan from the local bank.
I am so glad that I don't need a new car at this time!