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Over the last few decades, inflation has been steady and rampant incline. Inflation is the rate of increase in prices over a given period. The current cost of living for a single person in the United States is $38,266 per year. Yet, in 2002, the cost of living was around $27,924 per year. This is a notable jump over the last 20 years. To add to this, the cost to attend college has increased by 169% spanning from 1980 to 2019. One of the steady indicators of economic conditions has been the automotive industry. Specifically, in the piece, the status of the used car industry will be highlighted.
For the last month, the cost of a used car has declined. Nonetheless, before this decrease, the price of a used car continued to rise. From January 2021 to January 2022, there was a 40.5% increase in used car or truck costs. This dip in price is an excellent sign for buyers and those active in the used car market. However, this has more significant implications on the US economy and the inflation rates seen across the nation. The consumer price index measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The consumer price index for used cars and trucks is down around 3.8% from previous months. This is an excellent sign for the consumers and even more significant for the United States economy. It shows that progress is finally being made to get inflation under control. This dip seen in the CPI of used cars has many factors contributing to it. The primary factor at play is the consumer's thought process. People are unwilling to pay substantial amounts of money for a used vehicle when they could instead buy a brand new car. Consumers have figured out the system and decided to no longer buy-in, especially with many citizens still recovering from the financial hits caused by the COVID-19 pandemic.
The past year has seen a rampant increase in the cost of purchasing a used vehicle. However, recently, there has been a sudden decrease in the price of used cars in the United States. This decrease is mainly due to the change in the consumer thought process. Buyers have decided to hold off on paying egregious prices for used vehicles. Coincidentally, the decrease in the price of a used car is predicted to have significant effects on the United States economy. The major takeaway from it all is that some progress is finally being made to help control inflation.
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