Soaring Used Car Prices Named as Key Reason for Skyrocketing Inflation
The Bureau of Labor Statistics reports the cost of previously owned sedans, pickups, and SUVs climbed 10% in April, accounting for over one-third of the 0.8% CPI increase.
The Bureau of Labor Statistics reports the cost of previously owned sedans, pickups, and SUVs climbed 10% in April, accounting for over one-third of the 0.8% CPI increase.
The latest U.S. consumer price index (CPI) data shows inflation rose to 4.2% instead of the expected 3.6%, and some blame skyrocketing prices for used cars as the reason why.
The Bureau of Labor Statistics reports the cost of previously owned sedans, pickups, and SUVs climbed 10% in April, marking the fastest increase ever since 1953. This increase accounts for over one-third of the 0.8% CPI increase, experts report.
The automotive industry is making fewer new vehicles as automakers struggle with a critical semiconductor shortage and heightened competition for raw materials. In fact, top auto manufacturers warn that without needed chips, a potential 1.3-million shortfall in U.S. car and light-duty truck production will result.
As the semiconductor shortage slashes vehicle production, rental car companies began buying used vehicles at auction and retail consumers started meeting their transportation needs in the used car market.
The shift has caused wholesale prices to soar. Wholesale prices rose 54% in April over 2020 levels at Manheim, the nation’s largest vehicle auction company.
Riding inflation is not expected to continue, report analysts.
Economic analysts maintain the increase in used car prices will ease as production ramps up and demand subsides. In fact, economists predict a return to normal inflation levels of around 2% by the end of the year.
Originally posted on Auto Dealer Today
More Showroom
New-Vehicle Prices Stay Put
Affordability pressures and model availability shaped new-vehicle sales in September, according to an analysis by Kelley Blue Book.
Read More →
EV Buyer Consideration Shifts
What drives American consumers to purchase an electric vehicle is shifting as the question moves away from Should I?' to 'Which features and experience do I want to have?'
Read More →
Year-to-Date Auto Sales Holding Their Own
A forecast through August shows that automakers have shifted strategies to keep deliveries and revenues up despite tariffs and other economic challenges.
Read More →
Slow to Robo
Ten years of polling consumers shows autonomous vehicles’ profiles have risen considerably, but even more people now want at least some level of control if they go that route.
Read More →
Dealers a Little Down
A third-quarter Cox Automotive survey finds them in a mixed mood, bummed by fallen customer traffic but encouraged by better profits, costs and EV interest.
Read More →
European EV Sales Skyrocket
The EV market on the continent held strong in July with almost 25% of new-car sales being fully electric units, a stark contrast to the U.S., where EV sales declined about 42%.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Used Lots Getting the Business
Many consumers are seeking out the units to save money, and the demand – higher in July than normal – is keeping supply limited and prices up.
Read More →
Used Market Stabilizes
The Carfax Used Car Index noted a major drop in used-vehicle price increases in July after several months of hikes.
Read More →
California Hybrids Reach State Record
The Golden State still leads the country in electric-vehicle registrations, but much like the rest of the U.S. its hybrid market share is up while full electrics stabilize after a dramatic first-quarter dip.
Read More →