Consumer Shift To Electric — Or High Prices Scaring Buyers Off? Used Car Index Shows Largest Decrease In 7 Months

According to consumer price index data provided by the U.S. Bureau of Labor Statistics (BLS) on Thursday, the used car and truck index showed a 1.1% decline, coming in at 7.2% following a 0.1% decline in August. This is the largest drop in the used car and truck index since March of this year.

The Manheim Used Vehicle Value Index is now down 0.1% from a year ago, as wholesale used vehicle prices decreased by 3% seasonally adjusted in September from August.

Image provided by Cox Automotive and Manheim

Last month, compact cars experienced the largest annual increase of 5.9%, followed by trucks and vans, which saw increases of 0.8%.

There may be a rise in demand for smaller, more fuel-efficient automobiles as consumers move away from SUVs. Midsize car costs decreased slightly at the same time, but luxury automobile prices experienced a larger dip, falling 4.8%.

Also Read: 4 Experts On What The 8.2% CPI Print Means For The Fed & The Markets: Could 'Supersize' Rate Hike Spark 'Rude Awakening'?

According to the data, the used car industry may be in for a difficult period ahead as a number of variables, including rising interest rates and gas prices, reduce demand.

ARK Invest CEO Cathie Wood said used car prices and the residual value of all gas-powered cars are likely to drastically decline, resulting in significant losses in the $1 trillion auto debt market.

Wood attributed the price drop to consumers shifting their preference toward electric vehicles in a Sunday tweet.

In terms of sales, Cox Automotive stated that used sales volumes decreased by 8% from August to September and by 10% from one year ago. Sales were down 18% from September of last year, which was a minor increase from August's sales decline of 19%.

Photo: Scharfsinn via Shutterstock