Statistics tell stories, with some of the best storytellers by numbers the numbers calculators at the U.S. Department of Labor who prepare the Consumer Price Index. Used truck and car prices represent the most dramatic example.
According to the latest Consumer Price Index and Manheim, Inc., the world’s largest wholesale auto auction, the overall inflation from May 2020 to May 2021 was 5 percentage. Combined, the inflation rate of used cars and trucks increased nearly 30 percent in the same time. Used vehicles comprise one-third of the entire inflation increase.
The automotive industry’s surge, similar to other industries, began at the start of the pandemic. Dealerships in most areas were forced to close in-person locations. Consumer demand tanked, with a two percent decrease in used-vehicle prices for May of 2020 from a year earlier.
Used truck, car prices skyrocketing
But the numbers changed quickly. High demand for vehicles added to the current microchip shortage resulted in supply shortages and huge price spikes. According to Manheim, pickup truck prices increased by 70 percent.
Not all vehicle segments had similar vast price hikes, but SUVs and crossovers rose 43 percent. Luxury, mid-size and compact cars all increased by 40 percent in the year beginning in May 2020.
The inflation rates in the used car and truck industries are furthered staggering when individual industries are considered.
Here’s a list from May 2020 to May 2021:
Food: 2.2 percent increase; New vehicles: (+3.3); Apparel: (+5.6); Car insurance: (+16.9); Airfare: (+24.1); Used cars and trucks: (+29.7).