Weekend Reading: Used Car Prices Edition

Weekend Reading_ Used Car Prices Edition

One of the more interesting economic fallouts from the global pandemic is the impact it’s had on used car prices.

Rental car agencies sold a good portion of their fleets when global travel shut down last spring. A semi-conductor shortage has slashed the production of new vehicles.

Now that travel is slowly returning, rental car agencies can’t get the new cars they need so they’ve been buying used cars. Lengthy wait times for new vehicles have other car shoppers looking to the used car market as well.

The result is soaring prices for used cars.

That gave this money blogger the idea to dust off (literally) his 2007 Hyundai Tucson and sell it.

My wife and I work from home full-time on our business. We live five minutes from our youngest daughter’s school, and our oldest daughter catches a bus nearby to go to her school. We order groceries online and have them delivered (the best $4.95 service fee we spend). Kids activities had been mostly curtailed this past year but even when they return we can easily manage them with one vehicle.

The Tucson hasn’t moved for 20 months. It only has 111,000 kilometres on it. Kelley Blue Book says I could get $4,500 to $5,000 for it. Not bad!

It’ll take a bit of work to clean it up, and it needs a new battery. But there’s never been a better time to sell it. And I think we’re ready to become a one-vehicle family.

This Week’s Recap:

I received some terrific feedback from readers on my Coast FIRE article this week. I really appreciate the comments and emails. It sounds like the concept of Coast FIRE really resonates with many of you.

Last week I shared how to reframe the RRSP advantage by focusing on the average tax rate in retirement. 

From the archives: Changing investing strategies after a market crash.

Promo of the Week:

I’m awash in Membership Rewards points and Aeroplan miles thanks to several almost unbelievable offers from American Express. There’s still time to grab one or more of these cards before the offers end August 3rd. 

American Express Platinum Card – Earn up to 150,000 bonus points: 70,000 when you spend $6,000 in the first six months, plus 10x points on groceries and dining (up to 50,000 points).

Sign-up for the Amex Platinum Card here.

American Express Aeroplan Reserve Card – Earn up to 100,000 Aeroplan points + 10x points on groceries and dining up to 50,000 points. Also, enjoy benefits like Maple Leaf Lounge access, an annual Worldwide Companion Pass, and priority airport services.

Sign up for the Amex Aeroplan Reserve Card here.

My strategy is to spend $1,000 per month on each of these two cards to maximize the grocery & dining points multiplier and meet the $6,000 minimum spend in six months. Granted, this is easier to do at grocery stores that accept American Express cards (Save On Foods, Sobeys, and Safeway) so your mileage may vary.

Max out both cards after six months and I’ll have 150,000 Membership Rewards points and 150,000 Aeroplan miles. I’ll convert the Membership rewards points to Aeroplan (giving me 300,000 miles) and aim to redeem them at 2 cents per mile.

That adds up to $6,000 in travel rewards for $12,000 in grocery and dining spending over six months. Subtract the hefty annual fees ($599 + $499 after redeeming a $200 travel credit) and I’m left with a net of $4,902. As I said, almost unbelievable.

Weekend Reading:

Our friends at Credit Card Genius have a great line-up of rewards cards that comes with a free $100 Amazon.ca gift card upon approval.

As travel slowly starts to open up, travel expert Barry Choi shares the best currency exchange options for travellers.

Erica Alini at Global News looks at the stealthy kind of inflation known as ‘shrinkflation‘ that’s reportedly on the rise.

Jesse Cramer at The Best Interest blog explains why investing at all-time highs is still a smart strategy.

Now, if you’re a net saver in the years ahead, you should be hoping for a market crash for better buying opportunities.

A look at the quest for the investment Holy Grail – an index of everything:

“A true ultimate index would go further, including other big asset classes, like commodities, and even private assets that do not trade on an exchange, like real estate, infrastructure, bank loans and stakes in hot Silicon Valley companies.”

Nelson Smith shares a short history of everyone who’s been wrong about Canadian housing.

Here’s Alexandra Macqueen with a terrific look at how this retired couple can spend their savings in a tax-smart way.

Most people want more financial literacy taught in school, but here’s why stock picking games in schools are harmful.

A better idea would be to spend 12 minutes watching this excellent video from PWL Capital’s Shannon Bender about how to choose the right asset allocation ETF:

Barry Ritholtz shared his top 10 money rules recently and asked other money experts to do the same. Here’s a collection of responses he received on Twitter.

Why early RRSP withdrawals can lead to a lifetime of regret.

I quit. Why a wave of resignations is prompting concerns over a labour shortage.

Many young retirees are giving up urban living for the small-town life, and, in many cases, lower house prices.

Millionaire Teacher Andrew Hallam looks at whether you should buy a stock that’s poised to join the S&P 500.

My Own Advisor Mark Seed looks at the emotional side of early retirement, including the key question of how will you structure your time.

Finally, seniors aged 75 and older will receive a one-time $500 OAS payment next month as part of a plan to boost old age benefits over the long term.

Have a great weekend, everyone!

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  1. Gerguin on July 17, 2021 at 8:21 pm

    Can I get Old age security at age60.how much it will reduce my amount.

    • David S. on July 18, 2021 at 6:02 am

      You must be 65 years old to begin collecting OAS. However, you may begin collecting CPP as early as age 60, though it is often better to delay receiving CPP until age 70, if you are able to.

  2. Brad S on July 17, 2021 at 8:54 pm

    I did the same with my 15yr old Civic. The Honda dealership offered me something like 2500 more than I would normally expect. I then bought a 2 yr old used car for what I thought was reasonable. If not for the current situation, likely would have kept the Civic until it started being too expensive to keep.

  3. Ron Sigal on July 17, 2021 at 10:12 pm

    Hi Robb
    Regarding the rapid accumulation of Aeroplan points with the current Amex signup offers: The final 30,000 Membership Rewards don’t post until between month 14 and 17 of membership, meaning you will have to pay the annual fee for the Platinum Card a second time . A more rapid way to accumulate over 300,000 Aeroplan points would be first acquire the Aeroplan Reserve card, then refer your wife to the same card. You would also receive the 20,000 referral bonus and the Aeroplan Reserve does allow you to accumulate the full 150,000 points in 6 months on each card rather than 17 months.

  4. Steve Oliver on July 18, 2021 at 4:16 am

    Hi Rob, i bought a 2012 Tuscon in 2017 for $14,000 plus tax with only 72,000 km. I hear today i can still get $12,000 for it. Thats crazy. It should be worth no more than $7,000 retail. Now Im afraid to replace it as I will have to over pay for another 5 year old Tuscon. Maybe I should keep it another 5 years?

  5. Cheryl on July 18, 2021 at 10:30 am

    Used vehicles are getting snapped up by exporters. Last year I did contract work for a company that bought used pick up trucks from Alberta, shipped to BC, and then I drove them across the border, 15 miles to their lot in Washington. From there they’d be detailed and then sold and shipped to various dealerships in the states. Who knew there’d be such a big demand for used vehicles from Alberta! Mostly Ford 150s and 350s, but one time I drove a bunch of 2020 Durangos with about 10 to 12 thousand km on them across the border. These were mostly lease returns. Sometimes brand new trucks that just hadn’t sold. Easy work while it lasted if you don’t mind getting hassled by suspicious border guards when the land borders are closed for non-essential travel. This was work and no one wants to shut down the economy between the two countries. The first truck I drove was a 2019 F150 that was going to a local vehicle auction and not heading south. Reason? Someone was taking pot shots at the Albertan driving it, so bullet holes in the door that the company didn’t want to deal with the body work on. Inside it was a nice truck, fully loaded. I made sure there was no blood before getting inside that one, but the gaping bullet hole didn’t bother me.

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