Inflation Is Still High. Used Car Prices Could Help Explain What Happens Next

https://www.npr.org/2021/07/13/ [login to see] /inflation-is-still-high-used-car-prices-could-help-explain-what-happens-next
Surging prices for used cars have been a major driver of inflation this year. Now, there are signs those price hikes may be shifting into reverse — and that could provide important clues about where inflation is headed next.

The prices dealers pay for used cars at massive auctions across the country finally dipped in June after hitting record highs in each of the four previous months, according to the Manheim Used Vehicle Value Index.

Those drops in wholesale prices bode well for those in the market for a used Jeep. While retail prices for used cars still surged in June, the fall in wholesale prices suggest that what consumers pay will likely start to fall soon.

Such an easing in prices would be consistent with the Federal Reserve's argument that the recent surge in consumer prices is likely to fade as pandemic bottlenecks are resolved and demand returns to more normal levels.

It's a view that's shared by many economists, though not all, who fear accelerating inflation could prove harder to reverse.