Already putting pressure on CPI inflation. Now comes tax-refund season.
By Wolf Richter for WOLF STREET.
Inflation pressures are rebuilding in used vehicles. Prices of used vehicles sold at auctions where franchised and independent dealers replenish their inventories rose by 0.4% in January from December, seasonally adjusted (red line), and by 0.6% not seasonally adjusted (blue line), according to the Used Vehicle Value Index by Manheim, the largest auto auction house in the US. The index is adjusted for changes in mix and mileage.
Since the low point in June, prices have risen by 4.9%, seasonally adjusted, and are at the highest level since October 2023. “While it’s not yet spring, wholesale values increased more than we usually see in the month of January, with particular strength at the end of the month,” Manheim said.
Supply at these auctions comes from rental fleets that sell vehicles they pulled out of service, from finance companies that sell their off-lease vehicles and repos, from corporate and government fleets, other dealers, etc. These prices are the costs for dealers, and prices that consumers pay, as tracked by the used-vehicle CPI, follow with some lag.