The car market has gone crazy.

Two years ago, my wife and I bought a brand new Buick from Hudiburg Buick in Oklahoma City for almost $10,000 below list price. I had priced the same Buick at four Tulsa area dealers and Hudiburg’s price was $3,000 below anyone else’s. And three of the four Buicks I was offered had between 2,500 and 5,000 miles already on them. The Hudiburg Buick Encore had seven miles when I picked it up in Oklahoma City.

Plus, in 2019 there seemed to be an overabundance of white Buick Encores. I don’t have anything against a white car but I wanted a different color because I thought white might lower the future value of the car. When I bought our Chevy Equinox in 2014, the Tulsa dealer made his best deal and then offered me the same car for $1,000 less if I would take it with a black exterior. Apparently, Chevy made too many black Equinoxes that year. (I would never buy a car with a black interior in Oklahoma because of the summer heat and because people think you are in the CIA if you drive a black SUV.)

Anyway, so my wife gets an email from a car rental company here in Tulsa that offers us $3,000 more than what we paid for the new Buick for our now used Buick (with 14,000 miles).

I couldn’t believe it. I was not tempted to cash in because the new Encores are not being discounted like they were in 2019.

There is a new car shortage because of a shortage of computer chips. The coronavirus last year increased demand for personal electronics like cell phones and laptops and production could not keep up with demand.

In March of 2020, car makers, suppliers and car dealership had to slow down or stop. They thought the demand for new cars would drop because of the coronarvirus depression but actually demand for new cars rose due to pent-up demand (partially due to 0% financing). The factories restarted but they haven’t caught up yet. Cars can require 500-1,500 of these chips.

A fire at a big chip factory in Japan just made things worse. And GM and Ford are making some vehicles without chips and just parking them until they can get the chips. But even when the chips come in, it may take weeks to get those vehicles to dealers.

Rental car companies sold a bunch of their cars in 2020 because of the decline in air travel. Now, air travel is robust and car rentals are in great demand.

This is why you see TV ads for local car dealerships wanting to buy your used car. The common theme is “we will buy your car (at the top price) even if you don’t buy a car from us.”

I have driven by some new car dealers in Tulsa and have been shocked at how empty this lots are. I have never seen it like this.

A friend of mine in the business told me I would get a premium price for my used 2014 Equinox (with only 75,000 miles). Car dealers can’t make money without cars and if you can’t get new cars, you have to trade used cars.

But I am not selling or trading either of my cars right now. They are both in great shape with low mileage they are exactly what we need. I like buying new cars but the prices right now are outrageous. I won’t buy anything until the market changes dramatically.

Cars are not good investments. They almost always depreciate in value. The only car I have even owned was a 1974 Super Beetle that I bought in 1976 for $2,000 and sold in 1996 for $2,000.

I could make money on my Buick right now but I like it too much to pull the trigger.