Selling A Car? Do It Now! Used Car Costs Are Surging

Em Unravelling

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A vintage carPexels

At a wedding last week, one of the groomsmen - a petrolhead - was talking to me about how crazy he is for cars. He tends to go through several a year, finding "bargains" on social media sale pages and eBay, driving them for a while, and then selling them when he gets bored. Usually, this is an expensive hobby for him because he often has to take the hit of a bit of a loss when he re-sells each car to buy another (having run up the mileage and added another owner to the logbook).

But not at the moment. At the moment, he said, there aren't enough used cars out there to fuel demand, and he'd sold his last 3 cars for as much as - or more than - he paid for them. "It's a seller's market," he said. "It really is."

And it really is. New figures from the US Labor Department show that there's been the biggest year-on-year increase in consumer costs over the past year since August 2008; they've leaped 5% this month, after rising 4.2% in the previous month.

This time, it was pushed up by higher prices for - you've guessed it - used vehicles. Sale prices for secondhand cars and trucks jumped 7.3% which, according to the Labor Department, accounts for about a third of the overall increase. It's a lot.

There have been fears that these steeply rising consumer prices (showing inflation rising faster than anticipated) could lead to interest rate hikes by the Federal Reserve, which is something nobody really wants to see. But other analysts say that it's a temporary surge in inflation caused by post-pandemic "bottlenecks", where demand outstrips supply. For example, people who were able to save money during lockdown are now clamoring to spend it, while businesses that couldn't produce goods as easily under lockdown restrictions might be slower to get up to full-stock speed.

If it's just a bottleneck effect then the inflation rise might only be temporary, suggesting that things could calm down again as time goes on and there wouldn't be a need for an interest rate hike. Consumers should keep an eye on things and be cautious, is the official line.

But in the meantime, if you've got an old car to sell, now is very much the time to get it shifted on and get some decent cash for it.

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A lover of horizons, hills, and words. Likes to write about uncomfortable things because too many people steer round those parts of life.

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