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

Affordable, Safe Cars for Teen Drivers
Families looking to balance affordability and safety in vehicles for their teen drivers can look to the updated list of recommended vehicles by IIHS and Consumer Reports.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
Holman Opens Porsche Dealership in Miami
The North Miami store features the brand’s signature Destination Porsche design concept, combining contemporary architecture and technology to create what the auto group calls an ultra-luxury experience.
Read More →
Chicago to Gain Cadillac Rooftop in 2027
The two-story Cadillac dealership is being constructed at the former Lincoln Yards site, owned and operated by Canada-based Jack Carter Auto Group.
Read More →
Mid-Atlantic Ford Store Has New Owner
A growing Maryland automotive group is only the 93-year-old dealership’s third owner after its longtime proprietors retired.
Read More →
Porsche Dealership Breaks Ground in Illinois
Barrington Porsche will be the new location for Murgado Automotive Group’s existing Porsche dealership currently in the Motor Werks of Barrington auto mall.
Read More →
Michigan Auto Group Acquires Ohio Rooftops
Feldman Automotive Group added two new brands, Honda and Toyota, to its portfolio with its latest acquisition of four Fireside dealerships in Ohio.
Read More →
California VW Dealers Go After Scout
The franchisees’ state-level actions follow a California auto dealers trade group lawsuit against the VW affiliate last year, both efforts to stop the EV maker’s plan to sell direct to consumers.
Read More →
EVs Gain Traction in Europe
First-quarter auto sales increased as more consumers took advantage of government incentives. Hybrid deliveries are leading the way on the electrifieds boom.
Read More →
California Holds EV Lead Despite Annual Decline
At nearly 14%, California had the lowest zero-emission vehicle market share in the first quarter since the fourth quarter of 2021, according to the California New Car Dealers Association.
Read More →