(Bloomberg) — The record surge in U.S. auto prices — which helped drive inflation to a four-decade high — may finally be over, say two firms that sell cars online.
Used-car prices, which have risen at an annual rate above 50% at times during the pandemic, went into reverse last month, according to a new report from CoPilot, a car-buying app. They peaked in the two weeks after the Christmas holiday, and have since declined about 1.4%, the firm’s data show.
Truecar, a digital marketplace that helps auto buyers connect with dealers, says there’s been a drop in new-car prices too. They fell 2% in January from December, while remaining about 16% higher than a year ago, according to its data.
To be sure, some caution is required, because it’s not the first time there’s been an apparent peak. Used-car prices posted some monthly declines last summer, according to one widely-used measure — but then resumed their upward climb.
The industry is still struggling with supply-chain disruptions. But some automakers say those problems may be easing. The semiconductor shortage is less acute in the current quarter than the last one, and should start to really diminish in the second half of this year, General Motors Co. Chief Executive Officer Mary Barra said on an earnings call this week.
The lack of chips held back production of new cars. That’s had a knock-on impact in the used-car markets, as buyers who couldn’t get the latest model looked for a fairly recent one instead — driving prices up.
CarPilot says there’s been a bigger drop in prices for used cars that are three years old or less — making them a better substitute for new ones — as dealers have expanded their inventories. The decline in that category is 2.1% since the early-January peak, while tor four-to-seven year-old models it’s about 1%.
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