The financial nightmare continues, and it’s taking a toll on Americans from all walks of life. Every day people are waking up to find that their lifestyles are getting more and more expensive, due to Bidenflation. Driving has become decidedly more pricey according to the latest February car report, which suggests that the situation will only be getting worse in the coming months. Buckle up, America.
February saw an unexpected acceleration in the inflation rate of wholesale used car prices, with prices climbing over 4% on the Manheim Used Vehicle Value Index. It was the third month in a row that the Index rose, indicating continued financial demand for used cars as consumers remain price-sensitive and opt for more affordable options than brand new vehicles.
Breitbart reports, in December, prices rose for the first time since May 2022, and in January, they rose 2.5 percent. There hasn’t been a monthly gain of this size since February 2009.
The wholesale index provided by Manheim is considered to be a leading indicator of both retail and wholesale new car prices. The decline in the wholesale index last year predicted a decline in used car prices measured by the Consumer Price Index a few months later.
CNBC discussed this hike at length.
Prices for used cars make up about 4.5 percent of the core Consumer Price Index. Consequently, increasing used car prices can increase the overall measure of inflation. There was a sharp rise in used car prices in 2021 that signaled a more widespread inflationary trend.
Because used-car prices are highly responsive to market conditions, they can sometimes serve as leading indicators of inflation. It takes longer for other prices to adjust to changes in demand. When inflation is rising, the used car market can be the first place to notice it.
Despite increases in the past three months, used car prices remain lower than a year ago. The Manheim Used Vehicle Value Index is down 7.0 percent from a year ago, which is less than the 12.8 percent drop recorded a month earlier.
For those looking to buy pre-owned vehicles, it seems the best time has already passed, unless they are willing to pay more for a lesser car. But this looming trend does yield some opportunities–specifically for individuals interested in starting a new car business. Those with entrepreneurial aspirations should feel lucky, as this is an ideal time to capitalize on the rising prices and increasing demand. Perhaps you could be the difference maker in the used car industry.
Let’s continue this conversation, in the comments below.