Boston Gal's Open Wallet

Americans purchased nearly 4 million used cars in May, jumping 23 percent over the previous month, according to CNW Research. That comes as sales of new cars have plunged roughly 34 percent, despite sweetened incentives and cash-back offers. Meanwhile, the average transaction price for a used car hit $10,156 in April, the highest price since 2005, CNW Research reported this week.

Across the country, auto dealers are confronting a shortage of used cars and scrambling to increase trade-in incentives, scour online car listings, and engage in bidding wars at auction. The supply of used cars, particularly newer models, has dwindled recently because of a confluence of factors: consumers are not buying new autos and trading in old ones; the number of repossessions is waning; and rental companies, which usually provide a large inventory of used cars, are holding onto their vehicles longer.

"We have to travel farther, spend more time, and invest more resources to get these used cars," said Adam Silverleib, vice president of Silko Honda in Raynham, where used car sales are up 15 percent this year. "It's costing us 10 to 20 percent more to get used cars. And less than 5 percent of that is passed on to consumers because otherwise the used cars would wind up competing with the new cars. So we're seeing less profit."

Indeed, Silko Honda recently sent out a flier to customers advertising new cars, with the promotion: "Right now Silko Honda is actually selling new Hondas for less than used."