Flight From The Cities: Used Car Prices Jump 6.7% in One Month

The price of used cars and trucks is soaring as Americans react to the disruptions caused by the coronavirus.

The Labor Department on Tuesday said that the price of used cars and trucks rose 6.7 percent in September alone. The previous month, used car prices jumped 5.4 percent. Compared with a year ago, prices are up 10.3 percent.

The surge in used car prices is likely driven by a huge increase in demand for cars and supply constraints, both linked to the pandemic and the changes it is working on the homes and workplaces of Americans.

Demand for single-family homes in the suburbs has accelerated as many Americans have sought more space for families working and studying remotely, school systems with in-school instruction, an escape from the increasingly dangerous urban streets, and relief from the loss of amenities such as bars, theaters, and restaurants.

This shift is likely fueling demand for cars and trucks. What’s more, Americans are seeking to purchase additional cars as alternatives to public transportation, which many fear could pose contagion dangers.

Another factor driving up demand is likely the avoidance of air travel. With far fewer Americans taking flights for vacations, driving trips have become more common.

The shutdown of U.S. auto production at the height of the pandemic this spring has also hurt the availability of new cars, pushing some buyers into the used car market. The prices of new cars, however, are up just 1 percent compared with a year ago.

At the same time, Americans may be holding on to cars for longer, constraining supply. Families that might have made due with one car, trading an older model for a newer one, may be holding on to a second car now that more family members are more frequently in the home. Americans who have lost jobs or fear losing jobs may also be holding on to used cars rather than trading up to a newer model.