Limited supply of used cars. Anyone really wonder why?

Missed in this story is the fact that we crushed thousands of good used cars a couple of years ago. These cars would have been good used cars for folks for years to come. Another "unintended consequenses" episode of idiodic government at work.

Used-car prices on the rise

More people feel they can no longer delay replacing their old vehicles, driving up demand.

By MSN Money partner on Mon, Jan 23, 2012 9:06 AM

In the market for a used car? Kelley Blue Book urges you to buy sooner rather than later, as prices are rising.

Of course, it doesn't pay to be strong-armed into it, especially not if your current vehicle still has some life left in it. And it will make sense to consider your used-car choice carefully, as certain models command a premium.

KBB, a leading source of car-value data, says used-car prices are likely to rise by 3% to 5% in the first quarter of 2012, and even more in the second quarter. "Non-luxury cars and crossovers increased between $50 and $100 in the past week alone, and they will likely continue to rise in the weeks and months ahead," KBB reported last week.

Between Jan. 6 and Jan. 13, the average trade-in value of a 2009-2011 midsized car increased $107, from $12,096 to $12,203, or 0.9%. Most other types of cars that age gained 0.5% to 0.6% that week. A 5% increase in the coming months would raise the price of a $12,000 car to $12,600 -- and that's serious money for budget-conscious Americans.

Credit goes to unusual market conditions. Supply has been tightened by a slowdown in lease returns, a key source of used vehicles, while at the same time the average age of cars on the road is going up as drivers postpone purchases in the weak economy. Now more people feel they can delay no longer, driving up demand. Post continues below.