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Why is the price of used cars going up?
Used car prices keep going higher. On average, buying a used vehicle would cost you $6,939 more in 2021 than it did this time last year. The increases are due to shortages in the market, as auto manufacturers struggle to keep up with demand for new cars.
Why used car prices are driving US inflation higher?
“The latest trends in the key indicators suggest wholesale used vehicle values will likely see further gains in the days ahead,” according to a Manheim report. The surge in used car prices this year amid supply chain disruptions and a rebounding economy has been a major contributor to the jump in U.S. inflation.
How does inflation affect car prices?
MarketWatch reports that in both June and April, the spike in used-vehicle prices accounted for about one-third of the overall increase in the cost of living. The New York Times reports that consumer prices overall have risen more than 5\% in the last year.
What do used cars tell us about inflation?
Surging prices for used cars have been a major driver of inflation this year. Surging prices for used cars and trucks accounted for more than a third of that inflationary spike. On a year-to-year comparison, prices surged 5.4\%, the highest in nearly 13 years.
How much did used car prices rise in June?
Prices for used cars and trucks in June were up 10.5\% compared to May, and up an astonishing 45\% year over year, according to the latest Consumer Price Index report from the Bureau of Labor Statistics (BLS). The rise in used car prices “accounted for more than one-third of the seasonally adjusted all items increase,” the BLS report stated.
Can America’s used-car market protect the economy from inflation?
But the story of America’s used-car market also helps explain why the White House and Federal ReserveChair JeromeH. Powell, who is charged with guarding against excessive inflation, insist the economy can absorb all that money without suffering a hard-to-control bout of inflation. Advertisement Story continues below advertisement
How much does an economy car cost in 2020?
Using the Consumer Price Index (CPI) to adjust for dollar value, that equals about $23,948 in 2020 dollars. 2 With increased efficiency, the synthesis of cheaper and more durable materials, and economies of scale, the real price of economy cars ought to decline with time.
What do used cars tell us about the economy?
What used cars tell us about the risk of too much inflation hitting the economy Nationwide, used car prices soared 17 percent nationally in seven months last year — the most of any product.