Sean D. Emory
USED CARS CONTINUE TO FALL SHARPLY - GOOD FOR INFLATION READINGS
I will be quick here:
Currently listening to the Manheim Used Car index presentation.
2/ Used car prices are down by their worst pace going back to 1998! The downward pressure is across the board and every segment is down -10%.
Remember: The MUCCI measures the avg $ of used cars at wholesale auctions across the United States. This flows into CPI with a lag.
We saw it crack CPI over the last several months, but it is NOT tracking 15%, so more deflation to come.
3/ This is NOT likely to get much better. Depreciation rates are plummeting. Depreciation typically flattens in Q4, but it continued lower. Manheim expects this for at least another couple of months.
4 / Some dealers have been hiding out in older cars to meet the affordability issues. The graph on the right shows how weakness is now across models and ages.
5/ I often post the $TSLA used car update. Here it is today.
Price trends across time frames. Not pretty, pricing continuing downward trend again.
Year over year
Used cars continue their downward move. While not good for dealers, this is good for consumers, and for inflation readings.
This is not a recommendation to purchase or sell any securities mentioned.