“Used cars are growing in value faster than the stock market and, more recently, even some cryptocurrencies like Bitcoin,” said Jim Bianco, president of the research firm Bianco Research in an interview with CNBC . “If you are wondering what your best investment this year is a stock or an asset, know that it could be the car in your garage”, conclude Jim.
Jim Bianco came to this conclusion after analyzing the Manheim index of used car prices, which is used to keep track of market price trends.
Jim White
“Over the past 4 months, used cars have increased in price by more than 20%. Not only is this percentage higher than the S&P index, (the US stock index) but in the last 4 months, this growth has been higher than Bitcoin. According to the latest data we have On December 15th, the price of this asset class has continued to rise and has not yet peaked, at least until now “, Bianco said.
Because used cars are worth more than Bitcoins
Compared, the price of Bitcoin has risen by around 5% in the past four months, based on the value of the cryptocurrency transaction dated December 24th. And the S&P 500 index for the full year, so far, has only gained 26%.
The main reasons for the increase in the value of used cars, cited by Jim. White, are the increases in the prices of new cars, due to the shortage of semiconductors, and the “engagement” with their car of the first users who are more reluctant to change cars, due to the too high prices of a new car . In practice, a vicious circle that hardly, at least in the short term, seems to have an end.
credits CNBC
Car prices are at record highs, according to a report from the auto research firm Kelley Blue Book. A November, the average price for a new car was $ 46,320 while used cars had an average price of $ 27,569. Too low a difference. And this data means an increase in the cost of a used car of 27% compared to the same period last year.
However, Jim Bianco also noted that the current rise in used car prices is most likely a sign of a market bubble and the “crowd” effect created by speculators. In practice: “run to buy a used car before the price goes up”. However, this could affect the inflation index, which in the United States was very high this year even if for 2022 the same Bianco it involves a descent that will be much slower than most people think.
“What’s happening in the used car market has all the telltale signs of a bubble,” said Jim. Used car prices are considered a depreciable commodity. They shouldn’t go up in price. However, this year they have increased in price by 49%. “
In response to questions about the spike in new car prices, Jim provided no specific comments or numbers, stating that this is precisely something no one can predict.