Used car prices continue to climb as used vehicle supply remains low

Used car prices are climbing and the pool of available models is drying up one year after the federal “cash for clunkers” program spurred consumers to scrap old cars for new ones.

Used cars are selling for the highest average price in at least seven years, according to Edmunds.com, an online auto consumer guide. Last month, the average price of a three-year-old vehicle spiked 10.3 percent, to $19,248, compared to July 2009.

It’s a question of supply and demand.

Supply is down because “cash for clunkers” required old vehicles to be destroyed, rather than allowing them to be resold. In addition, fewer leased vehicles are being turned in and available for sale because automakers all but abandoned leasing during the industry collapse of 2008 and 2009.

Demand, meanwhile, is up as some cautious consumers choose to buy used cars, rather than expensive new ones.

“People are hesitant in making big-ticket purchases, that’s why we’re seeing