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Used-car prices continue to rise

Craig Trudell
Bloomberg

Before discussing how the U.S. was handling the coronavirus during a news conference this week, President Donald Trump wanted to discuss, of all things, the rising cost of used cars.

“The strength in new-car sales is also evident in the used-car market, where soaring demand – literally soaring demand – is putting upward pressure on the used-car prices,” Trump said on Aug. 4. “This is a leading indicator of the motor-vehicle industry.”

New-vehicle sales have held up better than feared during the coronavirus pandemic, leading to shortages of some models. That's sending some shoppers to used-car lots and helping drive up prices.

The trend Trump called out is continuing, according to market researcher J.D. Power. Wholesale auction prices have risen for 15 consecutive weeks, surging 34% during that span.

Prices collapsed in April, when physical auctions were shut down across the country. But new-vehicle sales have held up better than feared, leading to shortages of some models, particularly pickups and sport-utility vehicles. That’s sending some shoppers to used-car lots and helping drive up prices.