Used vehicles for sale are seen at an auto mall in Ottawa, on April 26, 2021.Justin Tang/The Canadian Press
In mid-2021, when “transitory” was the go-to word for central bankers trying to ease concerns about inflation, U.S. Federal Reserve chairman Jerome Powell highlighted surging used-car and truck prices, which were up 45 per cent from the year before and accounted for one-third of the jump in core inflation.
Citing a “perfect storm” of strong demand and supply disruptions, he urged calm: “They should stop going up and at some point should actually go down.”
“Transitory” was eventually dropped from central-bank speeches as inflation proved to be more entrenched, but on the used-vehicle front, Mr. Powell eventually turned out to be right.
In October, used-car and truck prices saw their fourth straight monthly decline, which economists took as a sign that overall inflation has turned a corner. Even though price tags on used vehicles are still well above where they were in 2019, the annual price change has almost returned to its prepandemic flatline rate.
The used-vehicle picture in Canada is less clear, partly because Statistics Canada only started including used cars and trucks in its inflation calculation starting in May. That said, used-vehicle prices in Canada were still rising at an annualized rate of five per cent as of September.
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Jason Kirby