The sign advertises the cash paid to a used car on January 12, 2022 in Alhambra, California.
Frederick J. Brown | AFP | Getty Images
Detroit-Wholesale used car prices have fallen sharply from record highs set in January, Higher inflation It may be behind us in the United States.
Cox Automotive Said on friday The Manheim Used Car Value Index, which tracks the prices of used cars sold at US wholesale auctions, fell 1% from March to April, the third straight month since the first month of the year.
“We’re back to a car that’s clearly declining again, which is good news for both inflation and consumers looking to buy a car,” Jonathan Smoke, chief economist at Cox Automotive, told CNBC. Told.
Wholesale car prices have fallen 6.4% since January’s record. However, prices are still very high and the index remains up 14% from a year ago.
The fall in prices comes from Mannheim’s estimate of a 13% drop in pre-owned retail sales from March, suggesting that demand is easing at record highs. I am.
For over a year, automakers have now Shortage of semiconductor chips This sporadically stopped production of new vehicles, resulting in record lows in vehicle inventories and higher prices. Due to this situation, many buyers have entered the used car market.
Smoke expects used car prices to continue to rise, but it will return to a “pretty normal pattern” and there is a possibility that prices will rise slightly later this year.
“In that respect, it’s potentially becoming a bit deflationary,” Smoke said, adding that it doesn’t necessarily mean that major price adjustments will take place. “This is not the commodity market that people are guessing, but used cars are actually an asset that provides people with utility.”
“For the past two years, there have been unusual conditions that have stimulated demand and supply has been limited,” he said.
Such a fall is good news for the Biden administration, which has blamed many of the country’s rising inflation rates. In the used car market.. Over the last two decades, used cars have averaged zero contribution to inflation. According to data from the US Bureau of Labor Statistics, it contributed more than 1% year-on-year in January.
Persistent inflation has raised prices to historic levels over the past year. This trend has caused political damage to the Biden administration and has raised concerns about “stagflation,” an unwanted combination of rising prices and stagnant economic growth.
– CNBC Kevin Breuninger Contributed to this report.