Falling used-car prices last month were a major contributor to subdued inflation for the U.S. economy. Auto analysts warn this could be a lasting trend with major negative implications for new-vehicle demand.
The 1.6% monthly drop in used-car prices last month was the biggest decline in a year, a Labor Department report showed Thursday. The overall core consumer price index increased just 0.1% from the prior month, a smaller gain than expected.
“It’s only going to get more competitive for the new side,” Charlie Chesbrough, Cox Automotive’s senior economist said Thursday during a tour a Michigan auto-auction facility run by Manheim, which Cox owns. “If we continue to see used prices decline, it will provide another value option, another buying option for folks who are in the market.”
Read the article at Bloomberg.