by Wolf Richter
Wolf Street
The new-vehicle shortages of 2021-2022 now mean lower supply to the used-vehicle market, amid solid demand.
Used-vehicle prices, which had spiked over the two-year span 2020-2021 by 65% on the wholesale side and by 55% on the retail side, provided rocket fuel to inflation. Then, as prices careened down in 2022 through 2023, giving up about half of the wholesale price spike and about a third of the retail price spike, they contributed to the sharp deflation in durable goods that helped decelerate overall inflation. But this drop in used-vehicle prices petered out in 2024, amid solid demand facing tight inventories due to reduced supply from rental fleets and lease terminations.