Data: Cox Automotive; Chart: Axios Visuals
Sky-high used car prices are losing altitude fast.
Why it matters: The remarkable climb in used vehicle prices was an early and ultra-visible driver of COVID-era inflation.
State of play: The Manheim Used Vehicle Value Index, a gauge of wholesale market prices for used vehicles, dropped for the fifth-straight month.
- Prices are down more than 15% since they peaked in January at an average of nearly $24,000.
- Wholesale prices are typically a leading indicator of the prices consumers pay, so this suggests better deals on vehicles could be coming to auto lots soon.
Yes, but: While prices for goods — such as used cars — were the key drivers of inflation in 2021, more recently, costs for services and housing are the driving force behind persistently fast price increases.
The bottom line: The inflation fight continues. But with car prices dropping, and house prices starting to crack as well, it suggests the Fed now has some serious traction in its fight to stabilize prices.