(Bloomberg) — Used car prices in the U.S. are soaring.
The Manheim U.S. Used Vehicle Value Index, a gauge of pricing trends, soared to a fresh record Tuesday as factors ranging from chip shortages to a rebounding economy conspired to keep pressure on automotive inventories.
The index, which updates mid-month, rose by 6.8% in the first 15 days of April from the final March figure and jumped 52% from the same period a year ago to a level of 191.4.
The index is compiled by market researcher Cox Automotive Inc. The data takes into account all U.S. sales through Cox’s Manheim automotive auctions that fall in to one of 20 different market classes, excluding motorcycles and vehicles like heavy trucks, and is adjusted for seasonality and mileage.
“Demand is perfectly stimulated from improving consumer sentiment, recovering jobs, accumulated pandemic savings, tax refund season, and American Rescue Plan cash payments,” Cox Chief Economist Jonathan Smoke said in an email. “Supply was decimated last year by COVID-19 shutdowns reducing new vehicle production, and used supply was reduced from strong demand last summer. Production remains limited as supply chains struggle to overcome issues like the semiconductor shortages.”