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<ul class="summary-list"><li><keyword id="12785955" type="UNKNOWN" weightage="60" keywordseo="car-prices" source="Orion">Car prices</keyword> will keep climbing into 2022 as the <keyword id="10389950" type="UNKNOWN" weightage="60" keywordseo="chip-shortage" source="Orion">chip shortage</keyword> lingers, <keyword id="6361649" type="UNKNOWN" weightage="60" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> said.</li><li>The bank expects prices for used and new cars to peak in the first and second quarters, respectively.</li></ul>If you waited for prices to fall before buying a car in 2021, Goldman Sachs says you'll have to wait a little while longer.Inflation has lifted prices across the board over the last 12 months, but the car market has seen some of the biggest increases. Prices for used cars and trucks have been among the biggest drivers of inflation in 2021, with costs soaring 31% over the last year. New vehicles have seen a smaller gain of 11%, but the global chip shortage has left dealers struggling to restore supply. New-car buyers couldn't find cars to buy, and used-car buyers found it increasingly hard to afford them.Relief won't come for at least a few more months, Goldman economist Spencer Hill said in a recent note. Prices for new cars "remain unsustainably low" compared to used vehicles, signaling there's "more inflation in the pipeline." Used cars from two years ago are selling for 10% more than their 2022 counterparts on average, despite having older technology and more mileage, according to the bank's analysis of Kelley Blue Book values. As such, new car prices will have to overtake used values before the market returns to pre-pandemic norms.<keyword id="11916719" type="UNKNOWN" weightage="60" keywordseo="used-car-prices" source="Orion">Used car prices</keyword> will be the first to peter out, peaking in the first quarter, according to Hill, a revision from the previous forecast of price growth cresting in December. New car prices will peak in the second quarter, three months later than last projected. Automotive categories already count for 40% of today's elevated inflation, and the longer-than-expected price surge will keep broad inflation high into 2022. The core Personal Consumption Expenditures price index — the Federal Reserve's inflation measure of choice — will now hit 3.4% in June, Hill said, up from the prior estimate of 3.25%. The measure will cool to 2.5% in December 2022, but that's still above the previous projection of 2.3% inflation.<h2>Plenty stands in the way of a car-market cooldown</h2>Cooling the car <keyword id="11893875" type="UNKNOWN" weightage="60" keywordseo="markets" source="Orion">markets</keyword> down won't come easy. Port congestion has only marginally improved over the last month, Goldman said, signaling it could take longer to bring foreign auto supply to the US market.The Omicron variant also adds a major risk to the supply recovery. If the variant sparks factory shutdowns in East Asian chip hubs, the rebound in car production could be further delayed. Even if semiconductor production slows half as much as it did during the Delta wave, the hit to auto manufacturing would raise new car prices as much as 2.7%, according to the bank. Used car buyers would take an even bigger hit, with values ripping another 7% to 8% higher, Hill said.There is some good news amidst the car-price chaos, the economist added. Key semiconductor suppliers spent big building out their production capacity in the third quarter and investment levels now sit above pre-crisis levels. While it typically takes between two and three quarters for capital investment to translate to boosted chip supply, Goldman expects the capacity build-out to fuel "improved microchip availability an rising auto production" in the second half of 2022.Relief for car shoppers is on its way, it'll just arrive later in 2022. Even then, prices have a long way to fall before nearing pre-pandemic levels.

Both used and new cars are going to cost even more in 2022, Goldman says

<ul class="summary-list"><li>The average age of a US car is over 12 years old, IHS Markit found.</li><li>Soaring prices for <keyword id="891685" type="PERSON" weightage="60" keywordseo="new-cars">new cars</keyword> have increased the market for used vehicles.</li><li>Car owners looking to repair aging vehicles could face delays and auto-supply shortages.</li></ul>The average age of US <keyword id="20632" type="ORGANIZATION" weightage="60" keywordseo="Cars">cars</keyword> hit an all-time high last year.The average car in the US was about 12 years old in 2020, an increase of nearly 2 months over the previous year, as COVID-19 shutdowns kept many people at home and their cars off the road, according to <a href="https://news.ihsmarkit.com/prviewer/release_only/id/4759502">data from IHS Markit</a>. The average age of cars has been steadily increasing for about 15 years now due to higher prices for new cars and the increasing longevity of vehicles, IHS said. <a href="https://www.businessinsider.com/how-much-used-car-prices-jumped-may-strange-recovery-chart-2021-6"></a>The firm said the pandemic lengthened the average age of cars, as cars did not tack on as many miles last year and many drivers looked to save money, <a href="https://www.cnbc.com/2020/12/23/covid-19-crippled-us-auto-sales-in-2020-but-it-could-have-been-worse.html#:~:text=Coronavirus%20crippled%20U.S.%20auto%20sales,could%20have%20been%20far%20worse&amp;text=Sales%20of%20new%20vehicles%20in,sales%20since%20at%20least%201980.980.">forcing new car sales to slump at the onset of the pandemic.</a>"2020 was a radical departure from the norm and challenged assumptions about how vehicle owners use their vehicles and accumulate miles," Todd Campau, the associate director of aftermarket solutions at IHS, said in the press release. Campau told <a href="https://www.wsj.com/articles/average-u-s-vehicle-age-hits-record-12-years-11623680640?mod=hp_lead_pos10">The Wall Street Journal</a> the longevity of vehicles has helped push used-car sales higher in an already red-hot market. He said cars are now more likely to change hands multiple times and last for over 200,000 miles."For that second or third or fourth owner, there's still meat on the bone," he said.Last month, <a href="https://www.businessinsider.com/how-much-used-car-prices-jumped-may-strange-recovery-chart-2021-6">used-car prices hit a 68-year record</a>, as shortages of several key goods, including computer chips, slowed the production of new cars. The average price paid for a new car last month hit a record of over $38,000, according to research firm <a href="https://www.abccolumbia.com/2021/04/22/j-d-power-says-the-average-car-price-is-up-8-from-last-year/#:~:text=According%20to%20J.D.%20Power%20and,8%25%20from%20a%20year%20ago.">J.D. Power.</a>Surging prices for new cars have made <keyword id="71298" type="PERSON" weightage="60" keywordseo="used-cars">used cars</keyword> an increasingly valuable commodity. Many used-car sellers are profiting from sales, and even making money off <a href="https://www.businessinsider.com/used-cars-prices-broken-engines-frames-selling-profit-high-demand-2021-6">vehicles with broken engines and car frames.</a> Used-car prices show no signs of flagging, IHS said. Repair and maintenance shops are poised to benefit from the lengthening life span of cars, as more car owners look to salvage older vehicles, IHS pointed out. But, supply chain snags could make car repairs even more expensive. Last month, <a href="https://www.fox26houston.com/news/auto-part-microchip-shortage-slowing-car-production-and-repairs">Fox reported</a> that Texas customers were waiting anywhere from 15 to 30 days for new parts to come in from overseas as <a href="https://www.businessinsider.com/cargo-ships-waiting-to-dock-california-contributes-supply-chain-crisis-2021-4">several key ports face months of shipping backlogs.</a> Typically, drivers would turn to rental cars when waiting for vehicle repairs but <a href="https://www.businessinsider.com/rental-car-shortages-us-travel-demand-chip-shortage-2021-4">rental cars are in short supply this year.</a> In April, <a href="https://www.businessinsider.com/rental-car-shortages-us-travel-demand-chip-shortage-2021-4">Insider's Brittany Chang</a> reported that some rental cars in Hawaii are going for over $500 a day.Overall, the pandemic has made it an expensive time to be a car owner. Skyrocketing new and used-car prices have made it inadvisable for many to invest in a new vehicle, while supply chain snags could make it difficult for drivers to maintain aging ones. A <a href="https://www.businessinsider.com/gas-prices-skyrocketing-in-us-expected-increase-further-summer-2021-4">surge in gasoline prices</a> has also tacked on new expenses for drivers with long commutes.

Americans are keeping their cars longer than ever before, as used-car prices hit record highs

<ul class="summary-list"><li><keyword id="11400078" type="UNKNOWN" weightage="60" keywordseo="used-car-prices">Used car prices</keyword> rose just 0.2% in July, a sharp slowdown from the surge seen over the three prior months.</li><li>The category was the largest driver of stronger <keyword id="22195" type="COMPANY" weightage="60" keywordseo="Inflation">inflation</keyword> during reopening, but its surge is ending.</li><li>Most economists expect vehicle inflation to cool further as demand wanes and shortages are addressed.</li></ul>Prices of <keyword id="71298" type="PERSON" weightage="60" keywordseo="used-cars">used cars</keyword> and trucks skyrocketed as the <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> reopened and powered much of the US's stronger inflation over the last few months. It's the latest development in a debate engulfing economists over whether strong inflation will stick around and endanger the recovery, or fade away as the economy normalizes. Soaring prices for used vehicles sat at the center of the debate.But the surge already seems to be over.Used vehicle prices <a href="https://www.businessinsider.com/cpi-inflation-july-price-growth-index-economic-data-supply-shortages-2021-8">rose just 0.2% in July</a>, the Bureau of Labor Statistics said Wednesday. That's the weakest inflation in that category since February, when prices slid by 0.9%. It also marks a sharp deceleration from the previous three months, which each saw prices climb at least 7.3%.From April to June, used vehicles were easily the single-largest contributor to soaring inflation. The reasons were simple. A global semiconductor shortage hampered auto production, forcing Americans to eye used vehicles instead. Since the supply of used vehicles is fairly limited, the sudden uptick in demand left dealers raising prices at breakneck speed.Now, that growth has practically slowed to a standstill. The drop helped the core <keyword id="134096" type="COMPANY" weightage="60" keywordseo="consumer-price-index">Consumer Price Index</keyword> - a popular inflation gauge that leaves out quickly changing food and energy costs - climbed 0.3% in July, short of the 0.4% estimate. The standard <keyword id="6355865" type="UNKNOWN" weightage="60" keywordseo="CPI">CPI</keyword> gauge rose 0.5% last month, matching estimates and marking a slowdown from June's 0.9% leap.For most economists, the tepid inflation for used vehicles probably wasn't a surprise. The consensus view around inflation maintains most of the overshoot is linked to supply shortages and the sudden reopening of the US economy. While Americans immediately boosted their spending when lockdowns ended, producers weren't so quick to respond. That mismatch helped inflation swing higher in recent months.Yet as supply chains heal and demand wanes, experts anticipate that faster price growth will fade. The Biden administration and the Federal Reserve hold the same view, with the latter repeatedly characterizing the stronger inflation as "transitory." While the Wednesday CPI report is just one set of data, it suggests the consensus outlook could prove correct.July figures revealed "significant cooling in transitory inflation," Bank of America economists led by Alexander Lin said in a note. Data shows persistent inflation "holding firm," and transitory factors linked to reopening are "likely to soften further going forward," they added.Used cars are among those factors set to soften. The bank expects prices for used cars to decline starting in September.A similar trend emerged in airline tickets, which saw prices skyrocket as people got back to traveling. Fares dipped 0.1% in July after rising sharply through summer. Prices still sit nearly 10% below pre-pandemic levels, and high-frequency travel data suggests the recent uptick in virus cases could lead ticket inflation to flatline for some time, the economists said.The transitory argument, then, is winning out. And with the Delta variant threatening new economic restrictions, strong demand is likely the least of economists' concerns.

The biggest reason to worry about runaway inflation just evaporated

<ul><li>Indian car manufacturer <keyword id="6357096" type="UNKNOWN" weightage="20" keywordseo="Mahindra-Mahindra">Mahindra &amp; Mahindra</keyword> announced that the price of its vehicles would go up by ₹36,000 from July 1. </li><li>The price hike by companies is being attributed to the new safety norms and the BS VI norms followed by the Indian government. </li><li>However, car sales continue to see a decline in India.</li></ul>In India, car sales have been sliding with almost every other automobile giant reporting a decline in sales in the past few months. However, if you thought that would make cars cheaper, well, think again. Car prices are only rising, thanks to the new safety norms which have been made mandatory. Automaker Mahindra &amp; Mahindra announced on Wednesday that it would be raising the prices of its personal vehicles by up to ₹36,000 across models from July 1. But the company is not alone. Maruti Suzuki had already declared a price hike for its new Swift and WagonR. Others like Honda and Tata Motors too have indicated the same. “Mahindra SUVs that will take a substantial price increase are the Scorpio, Bolero, TUV300 and KUV100 NXT, while brands such as the XUV500 and Marazzo will increase prices marginally,” Mahindra said in its filing as reported by IANS. The Indian government had announced the Bharat Stage VI norms for emission regulation. The norms will be adopted by April 2020, however companies had said that the adoption will result in a price-hike. According to <a href="https://www.financialexpress.com/industry/bs-vi-norms-car-prices-to-surge-sharply/1423128/">reports</a>, complying to the norms meant a 10% price hike for cars. Meanwhile, <keyword id="424067" type="PERSON" weightage="20" keywordseo="Car-sales-in-India">car sales in India</keyword> have had a sloppy run in the past few months. In <a href="http://overdrive.in/news-cars-auto/passenger-car-sales-in-india-dip-by-20-5-percent-in-may-2019/">May 2019</a>, passenger car sales declined by 20.5%. One of India’s biggest car manufacturers, Maruti Suzuki had <a href="https://www.financialexpress.com/auto/car-news/may-2019-car-sales-maruti-suzuki-reports-22-decline-in-sales-for-may-2019/1596276/">reported</a> a decline by 21% in its car sales for May. See Also: <a href="https://www.businessinsider.in/budget-2019-proposal-lower-tax-likely-on-cars/articleshow/69723060.cms">With 32 million jobs at stake in India’s auto sector, the Modi government may ease tax burden on cars</a>

Car sales are woefully slow in India but prices are rising due to new green norms

<ul class="summary-list"><li>New drivers face several pitfalls as the US <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> reopens and demand rebounds.</li><li>Prices for <keyword id="71298" type="PERSON" weightage="60" keywordseo="used-cars">used cars</keyword> and trucks surged 10% in April, the largest one-month jump on record.</li><li>Separately, the cyberattack that crippled the Colonial Pipeline has sparked gas stockpiling and price hikes.</li></ul>The economic reopening is reviving a sense of normalcy for Americans after more than a year of lockdowns. Millions are once again enjoying travel, entertainment, and indoor dining.But it's really expensive to drive anywhere, or even to buy or rent a car.Used car and truck prices <a href="https://www.businessinsider.com/inflation-consumer-price-index-april-cpi-economic-reopening-price-growth-2021-5">rocketed 10% higher in April</a> as a supply shortage gripped the market, the Bureau of Labor Statistics said Wednesday. The jump marked the largest one-month increase since data collection began in 1953. It also contributed to about a third of the 0.8% jump in broad <keyword id="22195" type="COMPANY" weightage="60" keywordseo="Inflation">inflation</keyword> last month."Used cars and trucks have been in high demand as rental car companies attempt to rebuild fleets they sold off during the onset of the pandemic and computer chip shortages have slowed auto production," David Kelly, chief global strategist at JPMorgan Asset Management, said in a note.Prices for new vehicles also climbed, albeit at a much slower pace. April saw new car and truck prices rise 0.5%, an acceleration after prices were stable in February and March.At the same time, the cyberattack that knocked out the Colonial Pipeline is <a href="https://www.businessinsider.com/1000-gas-stations-run-dry-after-colinial-pipeline-hack-2021-5">roiling more than 1,000 gas stations</a> across the eastern seaboard. The pipeline is critical for supplying much of the region's gasoline. It took less than a week for news of the hack to prompt stockpiling and price hikes.Shortages quickly mounted across the East Coast. Almost one-quarter of gas stations in North Carolina ran dry, according to data from GasBuddy. Georgia and Virginia both saw about 15% of their stations run out of gas. Metropolitan areas faced the biggest fallout; Atlanta saw nearly 60% of its stations run out of gasoline, while the figure rose to 71% in Charlotte. The data has been accompanied by countless photos of long lines forming at gas stations along the East Coast.To be sure, Wednesday inflation data showed gasoline prices falling 1.4% in April. And while May data is likely to show a rebound due to the pipeline disruption, experts don't expect the elevated rate of inflation to stick around.Federal Reserve Chair Jerome Powell has repeatedly said he expects stronger inflation to fade as the economy settles into a new normal. The central bank's latest projections see inflation climbing to 2.4% by the end of 2021 before settling at 2% in 2022.Richard Clarida, the Fed's vice chair, reiterated that outlook on Wednesday. Supply bottlenecks are hindering production in some sectors and contributed to the April inflation jump. As those shortages are addressed, inflation should fall in line with the central bank's long-term target, Clarida said in <a href="https://www.federalreserve.gov/newsevents/speech/clarida20210512a.htm">remarks</a> prepared for delivery to the National Association for Business Economics International Symposium."These one-time increases in prices are likely to have only transitory effects on underlying inflation, and I expect inflation to return to - or perhaps run somewhat above - our 2% longer-run goal in 2022 and 2023," he said.

Used car prices surged 10% in April - and drivers are getting hammered by other rising prices as the US reopens

<ul class="summary-list"><li>The seller's market for <keyword id="11939507" type="UNKNOWN" weightage="60" keywordseo="used-cars" source="Orion">used cars</keyword> and vehicles is starting to wobble.</li><li>Prices for <keyword id="13913914" type="UNKNOWN" weightage="60" keywordseo="used-vehicles" source="Orion">used vehicles</keyword> fell 0.4% in April, marking a third consecutive month of declines.</li></ul>The seller's market for used cars just celebrated its one-year anniversary, yet it's already on its last legs.Used vehicles were hit hardest by rising <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> as the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> reopened and spending boomed in early 2021. Pent-up demand for cars slammed into the global semiconductor shortage, crimping supply for both new and previously owned vehicles. That powered a massive price spike. Used car and truck prices <a href="https://www.businessinsider.com/used-car-prices-inflation-gas-shortage-stockpiling-drivers-slammed-reopening-2021-5">rose more than 10%</a> in April and June of last year and counted for roughly one-third of overall inflation throughout last spring.Headline inflation has since soared to levels not seen since the 1980s, but the used vehicle prices that powered the initial surge are now falling back to earth. Used car and truck prices fell 0.4% in April, according to government data published Wednesday. That follows a 3.8% decline in March and a 0.2% drop through February.After months of extraordinarily large price hikes, it might finally be a good time for car buyers.Prices for used cars and trucks now sit about 48% higher than pre-pandemic levels, Insider calculated with data from the Bureau of Labor Statistics. While that's still a hefty price hike for a 28-month period, it's down significantly from the January peak when prices were about 54% higher.Other measures show the market continuing to cool off through April. The <a href="https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html">Manheim Used Vehicle Value Index</a> fell to 221.2 last month, down from the March reading of 223.5. That's the lowest level since September 2021. The measure also shows used vehicle values peaking in January, signaling the recent slump is likely a prolonged downtrend.Several factors stand to extend the cooldown. Spending on durable goods — think vehicles, furniture, and appliances over food and medicine — declined through February and March, alleviating some of the demand that's boosted inflation. The pandemic-era drop in new vehicle inventories <a href="https://fred.stlouisfed.org/series/AUINSA">has also slowed through 2022</a>. If the supply of new cars recovers, that will likely alleviate supply pressures in the used-vehicle market as more cars are resold.To be sure, rising interest rates present a new hurdle for buyers looking to take advantage of falling prices. The Federal Reserve <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">lifted its benchmark interest rate</a> by half a percentage point in May, doubling the size of its typical rate hikes in a bid to more aggressively ease inflation. The central bank's rate increases affect borrowing costs throughout the economy, and while most auto loans have fixed rates, the higher rate will make loans pricier in the months ahead.Fed Chair Jerome Powell hinted earlier in May that more double-sized rate hikes are "<a href="https://www.businessinsider.com/federal-reserve-interest-rate-hikes-double-sized-future-meetings-powell-2022-5">on the table</a>" for the Fed's summer meetings, meaning vehicle financing will only get more expensive through 2022.Still, the decline in headline prices will bring much-needed relief for buyers after months of double-digit price increases and widespread shortages. Used vehicles might not completely be a buyers' market just yet, but it's moving in that direction.

It's finally a better time to buy a used car

<ul class="summary-list"><li>Companies are pushing the higher costs of raw materials onto their customers, the Federal Reserve said.</li><li><keyword id="172534" type="PERSON" weightage="60" keywordseo="price-hikes">Price hikes</keyword> are affecting restaurant, the auto industry, and grocers, it said in a report Wednesday.</li><li>Prices may keep rising in the coming months, the Federal Reserve said.</li></ul>Consumers could be paying more and more for goods in the coming months thanks to current shortages of <a href="https://www.businessinsider.com/us-labor-shortage-workers-hiring-chamber-commerce-jobs-emergency-2021-6">labor</a> and raw materials, according to a <a href="https://www.federalreserve.gov/monetarypolicy/beigebook202106.htm">report</a> by the Federal Reserve published Wednesday.<a href="https://www.businessinsider.com/consumers-price-hikes-inflation-staples-cereal-trash-bags-appliances-2021-5">Price hikes</a> are already hitting <a href="https://www.businessinsider.com/restaurant-prices-labor-shortage-worker-wages-food-2021-6">restaurant meals</a>, <a href="https://www.businessinsider.com/used-cars-prices-broken-engines-frames-selling-profit-high-demand-2021-6">new and used vehicles</a>, and other products, the report said.The report compiled data from around the US. Federal banks across the country had seen general <keyword id="1391685" type="PERSON" weightage="60" keywordseo="Price-Increases">price increases</keyword>, but the sectors that were worst hit varied by location, the report said.Construction and manufacturing companies were paying more for raw materials, the report said: San Francisco businesses in particular struggled as fuel and <a href="https://www.businessinsider.com/why-is-lumber-so-expensive-homebuilding-real-estate-newbuild-inventory-2021-3">lumber</a> costs rose, for example. The Reserve said higher costs for freight, packaging, and petrochemicals had hit a wide range of industries.In the Philadelphia area, around three-quarters of manufacturers said they were paying more for raw materials, while the Federal Reserve Bank of New York said that businesses in all sectors expected widespread cost hikes in the coming months.In Philadelphia, many manufacturers said that the current <a href="https://www.businessinsider.com/us-labor-shortage-workers-hiring-chamber-commerce-jobs-emergency-2021-6">labor shortages</a> and supply chain disruptions cut their production.<a href="https://www.businessinsider.com/consumers-price-hikes-inflation-staples-cereal-trash-bags-appliances-2021-5">Businesses hiked up their selling prices </a>in response, the report said.More than a third of manufacturers in Philadelphia said they were now charging more for their products, while New York's Federal Reserve said price hikes were most notable in the manufacturing, retail, wholesale trade, and transportation sectors."Looking forward, contacts anticipate facing cost increases and charging higher prices in coming months," the report said.In Boston, the auto industry introduced moderate price increases to combat high demand and low inventory, while <a href="https://www.businessinsider.com/restaurant-prices-labor-shortage-worker-wages-food-2021-6">restaurant prices</a> in Massachusetts increased "sharply" to cover increased labor and <keyword id="6181" type="COMPANY" weightage="60" keywordseo="Food">food</keyword> costs.The report said that in San Francisco,<a href="https://www.businessinsider.com/restaurant-prices-labor-shortage-worker-wages-food-2021-6"> grocers and some restaurants raised prices </a>, while prices for <a href="https://www.businessinsider.com/hotel-flight-prices-making-vacations-more-expensive-data-2021-5">airlines tickets</a>, <a href="https://www.businessinsider.com/rental-car-shortages-us-travel-demand-chip-shortage-2021-4">rental cars</a>, and <a href="https://www.businessinsider.com/hotel-flight-prices-making-vacations-more-expensive-data-2021-5">lodging</a> were starting to normalize after plummeting during the pandemic.But some businesses told the Reserve that they were focusing on cutting costs rather than raising prices.The report also said that consumer buying habits were changing as the <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> reopened.The Federal Reserve Bank of New York said that there was a "sharp rebound" in demand for luggage and formal wear, and an increase in <a href="https://www.businessinsider.com/used-cars-prices-broken-engines-frames-selling-profit-high-demand-2021-6">sales of both new and used vehicles</a> to well above pre-pandemic levels, despite low inventories and the global chip shortage.Kansas City's Federal Reserve Bank, meanwhile, said that sales were above pre-pandemic levels for the majority of retail, restaurant, and auto businesses.And some businesses in St Louis said they struggled to keep up with growing demand. For manufacturers in Philadelphia, order backlogs, inventories, and delivery times were at or near record levels in May, the report said.

The Federal Reserve says prices of restaurant meals, cars, and airline tickets could keep rising, thanks to soaring demand and a shortage of workers

<ul class="summary-list"><li>Used-car prices likely jumped yet again in May, UBS says, following a 68-year record in April.</li><li><keyword id="71298" type="PERSON" weightage="60" keywordseo="used-cars">Used cars</keyword> have been one of the primary drivers of increased consumer inflation.</li><li>It's one strange part of the puzzle that is America's <keyword id="46126" type="ORGANIZATION" weightage="60" keywordseo="economic-recovery">economic recovery</keyword> from the pandemic.</li></ul>If you're in the market for a <keyword id="40524" type="PERSON" weightage="60" keywordseo="Used-Car">used car</keyword>, be prepared for some sticker shock. Prices are projected to have skyrocketed again in May, and that boom is probably going to be a primary driver of increased inflation.A note by a group of UBS researchers, led by Alan Detmeister, forecast a 10.8% price increase. That's even higher than April's <a href="https://www.businessinsider.com/used-car-prices-saw-their-biggest-monthly-price-increase-ubs-2021-5">record-breaking surge</a> of 10%.<div type="image" title="used car prices jump" height="769" width="1026" msid="83317035" hostid="261"></div>Those pre-owned cars are adding significant mileage to inflation in the US. UBS projects that core Consumer Price Index (CPI) will have another "massive" rise in May; simply put, that means things got even more expensive. That follows a <a href="https://www.businessinsider.com/inflation-consumer-price-index-april-cpi-economic-reopening-price-growth-2021-5">13-year high in April</a>. In both April and May, the increase is "heavily driven" by <keyword id="11400078" type="UNKNOWN" weightage="60" keywordseo="used-car-prices">used car prices</keyword>, according to UBS.Used cars are just one of a myriad of <keyword id="475892" type="PERSON" weightage="60" keywordseo="shortages">shortages</keyword> throughout the US <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword>, part of the country's strange rollercoaster of a recovery. A global computer-chip <keyword id="62654" type="PERSON" weightage="60" keywordseo="shortage">shortage</keyword> has wreaked havoc on the automotive industry, potentially costing it up to $110 billion just this year, <a href="https://www.businessinsider.com/chip-shortage-expected-cost-auto-industry-car-makers-110-billion-2021-5">Insider's Dominick Reuter reported</a>. Those chips are <a href="https://www.businessinsider.com/why-is-there-chip-shortage-car-companies-electronics-supply-chain-2021-2">used for everything</a> from car engines to Bluetooth capabilities. That's <a href="https://www.businessinsider.com/why-is-there-chip-shortage-car-companies-electronics-supply-chain-2021-2">slowed production of new cars</a> - right when Americans are itching to buy them, as <a href="https://www.businessinsider.com/why-is-there-chip-shortage-car-companies-electronics-supply-chain-2021-2">Insider's Katie Canales reported</a>."With pressures on the used car market, along with returning demand for travel, we expect further increases in these categories in the coming months," the UBS researchers write. They also expect "solid" price increases for new cars and apparel.<h2>Another shortage could be holding up economic recovery</h2>Last week brought the May jobs report, which tracked payroll gains for the month. It showed signs of labor-market acceleration, as <a href="https://www.businessinsider.com/may-jobs-report-559000-payrolls-unemployment-rate-recovery-labor-market-2021-6">Insider's Ben Winck reported</a>, with the unemployment rate dropping. However, the number of payrolls added came in below expectations. A separate UBS note from researchers led by Andrew Dubinsky said jobs are rebounding slower than expected because of shortages - "temporary labor supply bottlenecks implied by strong wage gains are slowing growth." For instance, the youngest workers, who are 16 to 24, saw declines, which UBS attributes to them potentially returning for in-person schooling.So something else is getting more expensive: The amount that workers get paid. Employers are forking over more money to try and get workers to join their workforce. As the UBS researchers write, "Annualized leisure <keyword id="2372711" type="PERSON" weightage="60" keywordseo="wage-growth">wage growth</keyword> of around 20% in the past three months suggest the recovery is being held back by labor supply." That <a href="https://www.businessinsider.com/wages-growth-labor-shortage-jobs-report-may-rehire-unemployment-data-2021-6">wage growth</a> signals that labor-market-supply issues will be temporary, UBS said. But it's not just a matter of wages keeping people out of the workforce. Some <a href="https://www.businessinsider.com/labor-shortage-unemployment-benefits-america-reopening-rethink-work-employment-wages-2021-5">unemployed workers</a> are rethinking work and what they want out of it, while others struggle with a <a href="https://www.businessinsider.com/labor-shortage-hiring-outlook-skill-gap-job-market-chamber-commerce-2021-6">labor mismatch</a> - the jobs that are open don't necessarily fit with their skills, or previous experience. Despite all of that, it doesn't appear that increased unemployment benefits kept workers from returning in May. In <a href="https://www.businessinsider.com/republican-states-cutting-unemployment-benefits-expanded-300-weekly-biden-stimulus-2021-5">25 GOP-led states</a>, governors have prematurely announced an end to federal benefits to get workers back, but, as <a href="https://www.businessinsider.com/may-jobs-report-strong-despite-enhanced-ui-gop-cut-2021-6">Insider's Ayelet Sheffey reported</a>, they returned regardless.And, of course, there's still an ongoing pandemic. UBS, which is "optimistic" about labor force participation in the coming months, notes COVID fears may subside. That's <a href="https://www.businessinsider.com/schools-closures-and-elderly-covid-fears-behind-labor-shortage-ubs-2021-5">one factor</a> that may have been keeping older workers from returning.

One shocking chart shows used-car prices jumping another record amount in May, highlighting the strange gaps in the economy's recovery

<keyword id="6354427" type="General" weightage="100" keywordseo="apple" source="Orion">Apple</keyword> is working on a self-driving electric car that could launch in a few years and now a new report has claimed that the iPhone maker has partnered with a South Korean company to develop the autopilot chip for its car. According to a report by TheElec, Apple has partnered with a South Korean outsourced semiconductor assembly and test (OSAT) company to develop its car's autopilot technology. The project is led by Apple's South Korean offices. It was initiated in 2021 and is expected to last till next year. Apple is reportedly taking a similar route to Tesla. The Elon Musk-owned EV firm while developing its autopilot chip, used Samsung memory and gave assembly work to JCET STATSChipPAC Korea. <keyword id="2069539" type="General" weightage="20" keywordseo="Apple-Car" source="Orion">Apple Car</keyword> is also expected to use LED screens all over the vehicle to inform other drivers what the self-driving system is doing. The display would show braking information, the speed of the car and other messages in the form of graphics as well as video. For drivers parking the vehicle, the displays could show a goodbye message, or welcome the user on arrival to the vehicle itself, the report added. The upcoming Apple Car is expected to use a "C1" chip based on the A12 Bionic processor with in-cabin AI capabilities such as eye-tracking. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/kia-carens-price-specs-features-comparison-with-alcazar-india/slidelist/89589644.cms">Kia Carens launched in India — Price, specs, features compared to Hyundai Alcazar</a> <a href="https://www.businessinsider.in/business/auto/news/bajaj-chetak-is-now-available-in-20-cities-checkout-price-features-and-other-details/slidelist/89661825.cms">Bajaj Chetak is now available in 20 cities — Checkout price, features and other details</a> <a href="https://www.businessinsider.in/business/auto/news/best-scooters-and-bikes-in-india-under-1-lakh/slidelist/89588060.cms">Best scooters and bikes in India under ₹1 lakh</a>

Apple Car to reportedly feature autopilot tech co-developed with a South Korean company

<ul class="summary-list"><li>A lack of supply of new vehicles pushed used car <keyword id="6366990" type="UNKNOWN" weightage="60" keywordseo="Prices">prices</keyword> to record highs in May.</li><li>The CEO of an online marketplace told Forbes he's paying a premium price for damaged <keyword id="20632" type="ORGANIZATION" weightage="60" keywordseo="Cars">cars</keyword>.</li><li>"We're making money on these because auction pricing is so intense and high," he said.</li></ul>It's no secret that the used car market is absolutely bonkers lately, but demand has gotten so strong and supply so tight that one dealer says he's now buying cars he previously would never have considered."We've been seeing things clear at 103%, 110% to MMR (Manheim Market Report)- cars that we bring in we would never sell that are damaged, like frame damage or need massive engine rebuild," said Toby Russell, co-CEO at online used vehicle marketplace <a href="http://www.shift.com/">Shift.com</a>, in an <a href="https://www.forbes.com/sites/edgarsten/2021/06/01/used-vehicle-pricing-hits-bizarre-levels/?sh=223e29e52983">interview with Forbes</a>."Normally we would lose a little money on that, but we're making money on these because auction pricing is so intense and high. It's just a total dislocation in the market caused by a surge in demand and lack of supply coming from new cars," he said.Russell told Forbes that Shift now pays 25% more for vehicles than it did a the start of the year."That's like crazy," he said. "Usually <keyword id="71298" type="PERSON" weightage="60" keywordseo="used-cars">used cars</keyword> will depreciate 1% per week but the car sitting in your driveway is likely to be worth 25-30% more than it was in January."At the start of May, used-vehicle prices reached an all-time high, <a href="https://www.coxautoinc.com/market-insights/used-vehicle-prices-open-may-at-all-time-high/">topping more than $22,500</a>, according to a Cox Automotive analysis of vAuto Available Inventory data."Given the strong demand from consumers, and the tight supply situation, it seems likely that used-vehicle prices, already at all-time highs, will continue to rise," said Charlie Chesbrough, Cox Automotive senior economist. "At some point, prices will become too high, and demand will recede. But we are not there yet."The supply of used vehicles on dealers' lots is less than half of what it was this time last year (fewer people were buying cars then), and it's also well below the same month in 2019.As sales taper off from their frenetic pace earlier in the spring, Chesbrough says there's a simple reason for the slowdown: "Folks can't buy what isn't there."Jonathan Banks, vice president of Valuations Services at J.D. Power, said <a href="https://www.jdpower.com/business/press-releases/jd-power-and-lmc-automotive-forecast-may-2021">used retail prices are up 15%</a> this year with no signs of backing down."Used-vehicle prices have shown no signs of softening and are expected to remain exceptionally strong for the foreseeable future," he said.If you are looking to buy or sell a car and have a story to share, contact this reporter at <a href="mailto:dreuter@insider.com">dreuter@insider.com</a>

Car sellers are suddenly earning a profit on vehicles with broken engines and frames, as tight auto supply sends prices soaring to record levels

<ul><li>India, as the fourth largest automobile market in the world, may be due for a digital shift since most of its consumers are going online for their research.</li><li>The ‘Drive to Decide 2018’ report by Google and Kantar TNS indicates that 90% of car purchases are digitally driven. </li><li>Brands are increasing their online presence in order to make most of the opportunity.</li></ul>Adding a car to your cart may be the next step in online shopping according to the ‘The Drive to Decide 2018’ report by Google and Kantar TNS. Consumers in India already do most of their research online — checking in with brand websites and looking at reviews — that 90% of car purchases are digitally driven. 
 
 
 
 
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 It’s not only about being online but also about being a country that’s so obsessed with YouTube that we use it like Google Search. 
 
 
 
 
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 Since people are doing their due-diligence before buying a car, they are also more loyal consumers. According to the report, since consumers are more certain about their choice, instance of them switching between brands has declines by 4% over the last two years from 11% in 2016 to 7% in 2018. Here’s why India is poised to be the next online market for cars India’s already the 4th largest auto industry in the world, <a href="https://www.ibef.org/industry/india-automobiles.aspx">according</a> to the India Brand Equity Foundation. Most of the demand for cars is coming from the rising middle class and the young population of India. These are also the people who are a <a href="https://imrbint.com/site/reports/i-cube">part of</a> India’s massive growth in online users. So brands are beginning to pivot their strategies to cater to prospective buyers. Automobile manufacturers are increasing their online presence in order to be a part of the consumers online journey. 
 
 
 
 <div type="ExtQuote" text="“From just searching for manufacturers and dealers online, buyers today are actively looking for videos to answer their questions around car features to reviews to vehicle performance and more. Consequently, the focus for auto manufacturers has also moved to creating more immersive experiences that allow them to drive this action.”" auname="Vikas Agnihotri, Country Director - Sales, Google"></div>









 It doesn’t matter whether its the automobile industry or not, the number of Indian users online as increased dramatically since Jio started offering cheap access to internet and affordable phones. Last year Rajan Anandan, the vice president for India and South East Asia at Google, <a href="https://www.exchange4media.com/digital-news/india-to-reach-650-mn-internet-users-by-2020rajan-anandangoogle-india-70074.html">disclosed</a> that India is adding nearly 10 million daily active internet users every month. He added that video watch time has seen a 400% year-on-year growth in the country. These findings were based on research conducted by Kantar TNS. The research covers 4,000 respondents in India engaged via online or face-to-face interviews with an average length of 25 minutes for telephone interviews and 30+ mins for face-to-face interviews. See also: <a href="https://www.businessinsider.in/heres-how-young-india-is-buying-cars/articleshow/55141536.cms">Here’s how young India is buying cars</a> <a href="https://www.businessinsider.in/in-india-used-car-businesses-see-renewed-interest-from-investors-with-cardekho-raising-110-million/articleshow/67380667.cms">In India, used car businesses see renewed interest from investors with CarDekho raising $110 million</a> <a href="https://www.businessinsider.in/can-latecomer-maruti-suzuki-rev-up-electric-car-sales-in-india/articleshow/67534315.cms">Can latecomer Maruti Suzuki rev up electric car sales in India?</a>

You Searched For "car prices" and got 11 results

Both used and new cars are going to cost even more in 2022, Goldman says

Ben Winck

Americans are keeping their cars longer than ever before, as used-car prices hit record highs

Grace Kay

The biggest reason to worry about runaway inflation just evaporated

Ben Winck,Andy Kiersz

Car sales are woefully slow in India but prices are rising due to new green norms

Sanchita Dash

Used car prices surged 10% in April - and drivers are getting hammered by other rising prices as the US reopens

Ben Winck

It's finally a better time to buy a used car

Ben Winck,Madison Hoff

The Federal Reserve says prices of restaurant meals, cars, and airline tickets could keep rising, thanks to soaring demand and a shortage of workers

Grace Dean

One shocking chart shows used-car prices jumping another record amount in May, highlighting the strange gaps in the economy's recovery

Juliana Kaplan

Apple Car to reportedly feature autopilot tech co-developed with a South Korean company

IANS

Car sellers are suddenly earning a profit on vehicles with broken engines and frames, as tight auto supply sends prices soaring to record levels

Dominick Reuter

Indians are one step away from buying cars online

Prabhjote Gill

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