Used Car Prices Now Rising Faster Than Bitcoin, Other Assets

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Photo: Jim Watson (Getty Images)

Good news if you have a used car but don’t have bitcoin: Used car prices are rising faster than bitcoin and other assets, market researcher Jim Bianco told CNBC.

“If you want to know what’s the best investment you’ve probably had in 2021, it’s that car in your driveway or in that garage,” the president of Bianco Research told CNBC’s “Trading Nation” on Thursday. . “It appreciates faster than the stock market and lately faster than some cryptocurrencies.”

This analysis is based on the Manheim Used Car Price Index, which is designed to track price trends in the automotive market.

Image: Getty

In the past four months, these prices have increased by more than 20%. It’s more than the S&P 500 and more than bitcoin itself.

Bitcoin has risen by around 5% over the past four months, and the S&P 500 is up around 26% so far this year. This means that you are in a better financial position if you have a few used cars in your driveway rather than a few bitcoins on your hard drive.

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Bianco cites two drivers in the used car market: the semiconductor shortage and speculators who want to make vehicles profitable.

January 1995 = 100 Graph: Manheim

Manheim reports that car prices are at an all time high. In November, the average price for new cars was just over $ 46,000 and that of an average used car was around $ 27,500. This is an increase of 27% compared to the same period in 2020.

Bianco said this market is showing all telltale signs of a bubble.

In a market where used car prices are supposed to be a depreciating asset, they have continued to rise. And Bianco says that this year the prices are up 49-50%.

As to when those sky-high prices might start returning to Earth, Bianco says everyone can guess.

“It could go on for another year. It could go on for another two weeks, ”said Bianco. “The activity you see is probably bubbly.”

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