DETROIT, September 23 — Used vehicle prices in the United States surged to historic highs beginning in 2021, driven by a global shortage of semiconductor chips that crippled new-car production and pushed buyers into the used market. By the numbers: the Manheim Used Vehicle Value Index, a widely cited benchmark tracking wholesale prices at US auctions, rose from roughly 120 in early 2020 to a peak above 230 by early 2022 — an increase of more than 90 percent.
The index later retreated but remained elevated compared with pre-pandemic levels, and by 2024 it was still well above its 2019 range.
The chip shortage that emptied dealer lots
The core cause was a collapse in new-vehicle inventory. Automakers idled assembly lines as chip shortages hit, and US new-car sales fell from about 17 million units in 2019 to roughly 14 million in 2020 and under 14 million in 2021 and 2022. With fewer new cars available, consumers turned to used vehicles.
Rental companies, which normally sell off fleet cars after a year or two, stopped selling because they could not buy replacements. That removed a major source of supply from the used market.
At the same time, demand was supported by federal stimulus payments and low interest rates. The result was a rare inversion. In 2021 and 2022, some lightly used models sold for more than their new equivalents, and dealers paid premiums at auction for vehicles with low mileage.
The largest increase since 1953
The US Bureau of Labor Statistics reported that its used cars and trucks index rose 45 percent in the 12 months ending June 2021 — the largest such increase since the series began in 1953. The Federal Reserve’s interest rate increases from 2022 onward raised auto loan rates, and prices eased from their peak. But several structural factors kept used prices high.
The vehicles that would normally be three to five years old in 2024 and 2025 are the ones that were never built during the 2020-2022 production shortfalls, leaving a persistent “missing millions” gap in the used fleet. Average US new-car transaction prices also climbed above $48,000 by 2024, according to Kelley Blue Book, which pushed more buyers toward used cars and sustained demand.
Why it matters
The story matters because the auto market is a key input into US inflation, and the used-car spike was one of the largest single contributors to the consumer price index surge in 2021 and 2022. It also reshaped household budgets, dealer business models, and the affordability of transportation for millions of Americans who depend on cars to reach work. Key figures and entities include the Manheim index, the Bureau of Labor Statistics, the Federal Reserve, Kelley Blue Book, and the semiconductor shortage that began in 2020 and persisted into 2023.
What to watch next: whether the “missing millions” gap in the used fleet continues to hold prices above their pre-pandemic range as the Fed’s rate path and new-vehicle production levels evolve.
