A hotter-than-expected CPI report reflected price increases in just about every category, save for apparel, energy, and, of course, used autos. While the latter category remained 7.2% above 2021 levels, a seasonally adjusted 1.1% drop in September was noted as the third straight month of declines from a June peak. On an unadjusted basis, used car and truck prices fell 4.2% from August.
The report of continued declines in the CPI comes shortly after a decline in The Manheim Used Vehicle Value Index to 204.5 in September from 219.9 in June. The drop in September also reflected a year-over-year decline according to the index.
Along with prices, demand for used autos has declined sharply, according to Cox Automotive.
“Leveraging a same-store set of dealerships selected to represent the country from Dealertrack, we estimate that used retail sales declined 8% in September from August and that used retail sales were down 10% year over year,” a recent report reads.
Shares of Carvana (CVNA) -8.13%, Vroom (VRM) -5.13%, and CarMax (KMX) -2.87% all declined sharply in premarket trading, with the former two attracting particularly elevated trading volume. Debt concerns, especially for Carvana, add to negative implications stemming from the hot CPI report given its implications for Fed policy.
Auto dealers Lithia Motors (LAD), Group 1 Automotive (GPI), AutoNation (AN), Asbury Automotive Group (ABG), and Sonic Automotive (SAH) also marked declines in premarket trading. However, volume was far thinner for the physical auto dealers as compared to the e-commerce options.
Read more on Cantor Fitzgerald’s recent downgrade of Shift Technologies.