Used Car Prices Have Finally Run Out of Gas

Surging used car and truck prices have been Exhibit A for the bizarre supply-chain snarls that have caused inflation to shoot up this year as the economy has begun shaking off the effects of the coronavirus crisis. The rapidly rising cost of shopping for a certified, pre-owned Ford or Honda accounted for a whopping one-third of the steep overall increase in the Consumer Price Index during the spring and early summer. Overall, the inflation numbers—the likes of which haven’t been seen in decades—have become something of a political liability for the Biden administration while putting pressure on the Federal Reserve to start tightening its approach to monetary policy.

But now, the unprecedented run-up in the used car market finally seems to be running out of gas. Partly as a result, inflation on the whole slowed down a bit as well last month.