If you’ve noticed used cars are a lot more expensive than they used to be, you’re not alone as the U.S. Bureau of Labor Statistics has revealed the price index for used vehicles rose a staggering 10% in April.
The agency noted that’s the “largest one-month increase since the series began in 1953” and prices are up 21% over the past 12 months.
A number of factors are to blame as Bloomberg noted the semiconductor shortage is impacting production of new vehicles, and this has caused consumers and rental car companies to turn to the secondhand market. Of course, the pandemic also played a role as plant shutdowns led to lean inventories ahead of the chip shortage.
Also Read: Used Car Prices Jump As Demand Surges And New Vehicle Inventory Remains Low
Thanks to the increased demand for used vehicles, prices have drastically increased. In particular, auction firm Manheim said wholesale prices climbed 54% from a year ago.
New car prices are also up, but only slightly. The Bureau of Labor Statistics reported a 0.5% increase in April and that brings their unadjusted 12-month increase to 2%. That being said, NBC News cited Kelly Blue Book as saying the average new car costs over $40,000 and this is up more than 4% from a year ago.
Vehicles aren’t the only things getting more expensive as the government noted “Over the last 12 months, the all items index increased 4.2 percent before seasonal adjustment.” That’s the largest 12-month increase since September of 2008.
