A confluence of trends linked to the pandemic – including the fleeing of millennials to the suburbs and a rising preference for private transportation – has driven the price of used automobiles up by the quickest monthly gain since 1969, according to data from the Bureau of Labor Statistics.
While inflation on a year-ago basis can’t crack 1.4%, the prices of used cars and trucks have been rising at a faster rate in the past two months, after bottoming out in June. Back then, too many households with insecure incomes were cutting back on spending, and used car prices dropped from April to June.
But then two factors changed that dynamic.
First, gasoline prices dropped even faster than car prices as households kept close to home and consumer demand for fuel plummeted. Second, consumer transportation preference has evolved, as people eschew crowded buses and trains in metropolitan areas and long-distance travelers increasingly drive rather than fly.
The result is a booming market for used cars and trucks, with dealerships looking for supply to meet the demand of housebound families. And the fact that gasoline is 15% cheaper than it was last year is certainly supporting that demand, with prices of used cars and trucks 10% higher than they were in September 2019.