Jul 9, 2021 - Economy & Business
Explosion in used car prices finally stalls
The average price of a used car fell slightly in June, suggesting that the white-hot market for these vehicles may finally be cooling off.
Why it matters: Used car prices exploded as unprecedented supply chain issues during the pandemic limited the availability of new cars, an issue that spilled into the used car market.
- Surging used car prices have been a big driver of consumer price inflation in recent months.
By the numbers: The average price of a used car in the wholesale market in June fell 1.3% from May levels, as measured by the Manheim Used Vehicle Value Index. This was the first month-to-month decline since December.
- However, this is still 34.3% above year-ago levels.
- Pickup truck prices have led price gains, up 49.5% from a year ago. Vans and SUVs were up 33.4% and 32.5%, respectively.
- The most popular used vehicle in June was the 2018 Nissan Rogue SV, which went for $21,100 in the wholesale market. Last year, it was worth $16,750.
- The most popular used pickup was the 2018 Ford F-150 Crew Cab, going for $38,400. That was up from $35,000 a year ago.
The bottom line: "The latest Manheim number is an encouraging sign that the recent spike in consumer price inflation may soon reverse," Matthew Klein, author of The Overshoot, tells Axios.
- "After all, about 1 percentage point of the total 3.8% increase in the level of the core consumer price index over the past 12 months came from the surge in prices of used cars and trucks."