Used car prices spiked 6.7 percent in September, marking the biggest monthly move since February 1969. The jump followed a 5.4 percent increase in August, the U.S. Labor Department reported.
Second-hand automobile inventories have tightened in recent months due to a reduction in trade-ins caused by the drop in new car sales this year.
Prices have been on the rise since July and are up 10.3 percent year to date, while average new car prices increased just .3 percent in October and 1 percent so far in 2020 to a record high of $35,655, according to J.D. Power.
Industry insiders expect used car pricing to start coming down soon, however, as a new car sales recovery is underway, with third-quarter sales down 9.3 percent year over year compared to a 31.9 percent drop in Q2.
“Because we're selling so many new cars, we're getting trade-ins, so that's taking the pressure off of going to the auction and having to pay too much money," North Palm Beach Toyota dealer Earl Stewart told the Associated Press.
“The law of supply and demand worked,” Stewart said. “I think things are coming back to normal.”