Used Car Prices MoM

Used Car Prices MoM is the monthly % change in the Used cars and trucks index. The index covers the United States and sits in private transportation, a part of the Consumer Price Index. The Bureau of Labor Statistics, a federal statistics agency, builds it from 480 vehicles aged 2-7 years selected by sales. It counts business and government sales to consumers plus dealer markup, not private sales, trade-ins, new vehicles or rentals.

Valuations are collected on the 1st of each month and compared with valuations from the 1st of the previous month. The result appears in the monthly release around the middle of the next month under embargo, a publication ban until 8:30 AM ET. It is published with CPI-U for all urban consumers, CPI-W for wage earners and chained C-CPI-U plus tables, a Technical Note and next date. CPI-U and CPI-W are final while C-CPI-U is revised; adjusted data remove seasonal moves and unadjusted show paid prices. Seasonal factors are updated each February, revising five years of adjusted data.

The move reflects consumer transaction prices for cars and light trucks, a December 2023 weight of 2.012%.

• Subcompact, compact or sporty cars: price change for small used cars aged 2-7 years after depreciation and quality adjustments.
• Intermediate and full-size cars: price change for wider family segments under the same method.
• Luxury cars: price change for the high-end segment after both adjustments.
• Pickup trucks and vans: price change for household light trucks.
• Specialty and sport/cross utility vehicles: price change for this light multi-use segment.

In June 2021 headline inflation rose 0.9% on a seasonally adjusted basis after 0.6% in May, and 5.4% over 12 months unadjusted. Used cars and trucks jumped 10.5% in June on a seasonally adjusted basis and supplied more than 1/3 of that monthly gain. It was the largest monthly rise since June 2008, when the index rose 1.0%, and the 5.4% yearly gain was the largest since August 2008. The same table showed 45.2% growth over 12 months unadjusted, against 2.0% monthly and 5.3% yearly for new vehicles. The episode shows how the December 2023 weight of 2.012% could still drive a record headline month.

1. Expenditure weight: Consumer Expenditure Surveys, surveys of household spending, set aggregation weights. Relative importance is each weight as a % share in December.
2. Sample: A sample of 480 vehicles aged 2-7 years is chosen by sales from JDPIN, a dealer sales network. It is rotated nationally and rolled by model year each September to hold age fixed.
3. Monthly valuation: The office downloads estimated values on the 1st of each month from JD Power Valuation Services, a valuation provider. The Bureau collects no used prices itself.
4. Depreciation adjustment: Each quote is corrected for aging with exponent N/12, where N counts months since September. For example, $20,000 with a $22,500 younger value, 1.02 manufacturer-cost quality factor and N of 6 gives about $21,004.2.
5. Mileage and quality inputs: Since January 2024 mileage rises monthly on an exponential decay curve, a curve with smaller gains at high miles. Quality moves use the new-car manufacturer-cost adjustment, depreciated with the vehicle.
6. Aggregation and seasonal adjustment: Each adjusted value is divided by its prior-month value. All 480 relatives are combined with a geometric mean and a modified Laspeyres aggregation. The change equals (current minus prior) divided by prior times 100; $21,004.2 against $20,800 gives +0.98% before weighting. The base is 1982-84 equals 100, and series are filtered by X-13ARIMA-SEATS, a seasonal filter.