Anyone who’s shopped for a car this year knows that new ones are hard to get and used ones have gotten way more expensive. And we know why: There’s a global shortage of all the computer chips modern-day cars require. But October’s used car price growth still managed to shock even the experts.
The latest: The industry’s key index of used vehicle prices jumped another 9.2% over the span of just a month. That puts the index 38% higher than a year ago — compared to “just” 27% for the same stat in September.
Why it matters: The market for cars and trucks is one of those that’s most impacted by pandemic-era supply problems. That’s unfortunate because vehicles are big-ticket items that most Americans rely on to get to work and generally engage in life.
What’s happening: In contrast to what’s happening this year, October is historically one of the slowest months for used car sales.
- Usually, new cars are the star of the show in the fall, with new models rolled out and old models discounted, says Jonathan Smoke, chief economist at Cox Automotive. That’s clearly not the case this year.
- “The strongest months are always during tax refund season, so late fall usually represents the lull in the market before dealers begin to stock up for spring,” Smoke says.
The bottom line: The market is warped. Throw historical norms out the window.