U.S. Used-Car Prices, Key Inflation Driver, Surge to Record
(Bloomberg) -- Used-car prices, one of the biggest factors in U.S. inflation this year, rose to an all-time high in September as pandemic-driven supply-chain disruptions continued.
The Manheim U.S. Used Vehicle Value Index, a measure of pricing trends at wholesale auctions, increased 5.3% in September from a month earlier, the biggest monthly gain since April. The index is now up 27.1% from a year earlier.
Global supply-chain snags have hit new-vehicle production schedules, pushing some consumers into the used-car market and leading dealers to step up their buying efforts, according to the Manheim report, released Thursday. Retail used-car prices will likely remain elevated in the months ahead, it said.
Used-car prices have been a major contributor to U.S. inflation this year, holding roughly a 2% weighting in the overall consumer price index. The August consumer price index report showed a decline in used-car and truck prices, but that was a temporary pause rather than a peak.
Total used-vehicle sales have continued to fall, dropping 13% in September from a year earlier, according to Cox Automotive estimates.
The Manheim index is forecast to climb 30% in December from a year earlier and to drop 2% in December 2022, according to Cox Automotive.
The index accounts for data from all U.S. sales through Cox’s Manheim automotive auctions, which are adjusted for seasonality and mileage.
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