The prices of used cars and trucks rose 45% over the past year in America, the largest 12-month increase ever reported
FIGURES RELEASED on July 13th by the Bureau of Labour Statistics showed that annual consumer-price inflation in America had reached a higher-than-expected 5.4% in June, and that prices had climbed by 0.9% in that month alone. This confirmed a trend. In April inflation hit 4.2% year on year, the highest rate since 2008; it rose again, to 5%, in May.
About one-third of June’s overall month-on-month rise stemmed from the appreciating value of second-hand cars. According to the BLS, the prices of used cars and trucks rose by 45% over the past year, the largest 12-month increase ever reported. The latest index of second-hand values published by Manheim, America’s largest used-car auction business, suggests that prices of pick-up trucks have risen by an astonishing 50% in one year. Ageing usually quickly destroys a vehicle’s value; not now.
Used-car prices will not accelerate forever. Indeed, the Manheim index of wholesale prices dropped slightly between June and July . That may be a sign of things to come. The supply of new cars will recover once the chip shortage has abated, easing demand for older ones. For now, though, the brakes are off.
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