How Rising Used Car Prices Contributed To Inflation : Planet Money : The Indicator from Planet Money Used cars are expensive right now. Bloomberg writer Conor Sen thinks it might be a reason behind recent inflation. We explore how used cars got so expensive and used cars' relationship with the CPI.

Used Car Silver Lining: Indicators Of The Week

Used Car Silver Lining: Indicators of the Week

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Justin Sullivan/Getty Images
(Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images

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New cars, used cars, and car rentals are more expensive now than last year. In fact, Manheim's Used Vehicle Value Index has increased more than 34 percent since last year. Bloomberg writer Conor Sen thinks this increase contributes significantly to the latest CPI number.

A number of things are visibly responsible for the rising costs of cars. Car manufacturers closed factories during lockdown. Shortages in microchips and components result in less new auto production. Meanwhile, people have more money and demand to buy cars. This means some used models are as expensive as new cars. These forces create the ideal condition for used car prices to go up.

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