New and Used Car Prices in the Consumer Price Index: January 2023 Update
The Consumer Price Index (CPI) for January 2023 reveals mixed results for new and used car prices.
New Car Prices
* Flat in January
* Down 0.3% year-over-year
Used Car Prices
* Jumped 2.2% in January
* Up 1.0% for the year
* Largest monthly increase since May 2023
Overall Inflation
* US prices rose 0.5% over the previous month
* 3.0% increase year-over-year
Trend in Used Car Prices
* Rising month-over-month since September 2022
* Down 14.5% from February 2022 peak
* Still 23.6% higher than July 2019
Factors Driving Used Car Price Increase
* Low inventory
* Reduced off-lease vehicles returning to the market
* Seasonality (spring is typically a strong time for auto sales)
Transportation Services Sector
* Motor vehicle maintenance and repair up 5.9% for the year
* Car insurance up 11.8% for the year
Reasons for Rising Auto Insurance Costs
* More expensive vehicles leading to higher cost of parts and repairs
* Increased cost of labor
* Advanced technology in newer cars