Consumer prices rose again in October — albeit at a slower pace — as new-vehicle costs ticked up and used car and truck prices fell month over month.
The Consumer Price Index rose 0.4% on a seasonally adjusted basis last month after rising 0.6% in September, according to data published today by the U.S. Bureau of Labor Statistics. The index for energy also rose 0.7% MoM but lapped September’s steeper 5.2% increase.
The new-vehicle index ticked up 0.2% MoM while the index for used cars and trucks declined 1.2% MoM, according to bureau data.
The report did not include a year-over-year CPI comparison because data collection lapsed during the government shutdown in October 2025. Economists estimated core inflation would have landed around 2.8% if the data were available, according to Bloomberg.
High new- and used-vehicle prices continue to pressure consumers, which has implications for auto dealers, Mark McCall, president and chief financial officer at auto lender Global Lending Services, told Auto Finance News.
More customers looking to save money by purchasing used vehicles will keep driving dealer demand and competition for that inventory, McCall said.
“A dealer that’s traditionally focused only on used vehicles could see more pressure from the franchise dealers as they expand their competition for the used vehicles,” he said.
At Flagstaff Chevrolet in Arizona, new-vehicle sales are not as robust as in years past, but more owners holding onto their cars are feeding service revenue, owner Mark Harris told AFN.
“Customers are concerned about the added cost of the vehicle and the interest rates aren’t helping matters at all,” Harris said, noting more customers are seeking used vehicles that fit their budget.
That trend extends to automakers as well, with General Motors‘ new-car sales down in the past couple of quarters, Harris said. He sees interest rates needing to fall to restore buyer confidence.
Capital and funding considerations
The October CPI could affect capital costs as inflation readings feed into the Federal Reserve‘s considerations for setting interest rates. The Fed is scheduled to make its next rate decision on Dec. 9.
The two-year Treasury — a key benchmark for how auto financiers think about their cost of money — is up about a point year over year, further pressuring affordability, McCall said.
The Secured Overnight Financing Rate, a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, tracked with the Fed’s benchmark federal funds rate increase by a quarter percentage point to a range of 3.75% to 4% in September. SOFR daily rates, published every business day by the Federal Reserve Bank of New York, hovered between 3.87% to 3.97% through October and into early November.
A higher interest rate environment could prompt investors to move up in credit quality as it becomes easier “to hit target yield levels without taking excess credit risk,” Andrew Butville, senior director and ABS sector lead at MetLife Investment Management, told AFN.
“As a result, there could be a shift in demand from subprime to prime,” he said, though he noted the impact on the overall auto ABS market is likely marginal.
