Consumer Shift To Electric — Or High Prices Scaring Buyers Off? Used Car Index Shows Largest Decrease In 7 Months

According to consumer price index data provided by the U.S. Bureau of Labor Statistics (BLS) on Thursday, the used car and truck index showed a 1.1% decline, coming in at 7.2% following a 0.1% decline in August. This is the largest drop in the used car and truck index since March of this year.

Last month, compact cars experienced the largest annual increase of 5.9%, followed by trucks and vans, which saw increases of 0.8%.

There may be a rise in demand for smaller, more fuel-efficient automobiles as consumers move away from SUVs. Midsize car costs decreased slightly at the same time, but luxury automobile prices experienced a larger dip, falling 4.8%.

Also Read: 4 Experts On What The 8.2% CPI Print Means For The Fed & The Markets: Could 'Supersize' Rate Hike Spark 'Rude Awakening'?

According to the data, the used car industry may be in for a difficult period ahead as a number of variables, including rising interest rates and gas prices, reduce demand.

ARK Invest CEO Cathie Wood said used car prices and the residual value of all gas-powered cars are likely to drastically decline, resulting in significant losses in the $1 trillion auto debt market.

Wood attributed the price drop to consumers shifting their preference toward electric vehicles in a Sunday tweet.

In terms of sales, Cox Automotive stated that used sales volumes decreased by 8% from August to September and by 10% from one year ago. Sales were down 18% from September of last year, which was a minor increase from August's sales decline of 19%.

Photo: Scharfsinn via Shutterstock