The used car market has been one of the hottest and trickiest markets for consumers, investors, and analysts alike since the start of the COVID-19 pandemic. Organizations shifting to a remote work model, supply chain struggles, and labor shortages have all factored into the rising costs and lack of inventory within the used car market.

Each month the US Bureau of Labor and Statistics releases the CPI (Consumer Price Index) data to report the average trend of prices throughout various market categories within the US. One such category is the Used Car and Truck CPI which attempts to reflect the market conditions within the used car market.

Within this study, we will look at Vertical Knowledge’s used car data from 2019-2022 in comparison to the the Used Car and Truck CPI data reported from the United States Bureau of Labor and Statistics to learn how time-sensitive data collection can be used as a leading indicator to future CPI index values.


Vertical Knowledge tracks daily key metrics for used car sales and purchases for CarMax dealers across the United States. The data collected includes vehicle year, make, model, color, mileage, and pricing.

This collection allows users to predict the results of the company on a national level, as well as individual dealerships. Dealership data includes dealership location, unique ID, physical address, on- hand inventory, reported volume, revenue, and same-store sales. These data points act as a useful performance indicator for specific dealerships, car brands, and regional car market trends.



During the last quarter of 2019, CarMax’s sales volume averaged 1,920 vehicles sold daily, with an average price of $21,025. As the media began to bring awareness of the SARS-COVID-19 virus appearing in areas outside of Wuhan, China, in early 2020, there was an increase in used car sales, however, the average price of used vehicles decreased.

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. Less than 5 days later, the CDC had executed a “no sail order” for cruise ships, a travel ban was put in place for non-US citizens traveling from 26 European counties, and individual states had begun to implement shutdowns for schools, parks, and businesses, as well as face mask requirements to prevent the spread of the virus.

At this point, used car sales had already begun to plummet, while the prices began to rise to compensate for lost revenue. The entire country was following lockdown orders. Outside of essential workers and first responders, consumers had little need to drive. In fact many homes began to sell their used cars without purchasing new ones to make ends meet from lost wages.

On April 1, 2020, the Trump Administration issued the first $1,200 stimulus check under the CARES act
to give Americans financial relief. Over the next few weeks, used car sales began to pick back up at a
rapid pace. CarMax is one of the few used car dealerships with an accurate online inventory. It allows customers to have cars shipped to a dealership or customer residences... a desirable delivery method during unprecedented times.


From mid-2020 to March 2021, we saw supply chains unraveling, stimulus checks being spent, manufacturing plants closing down1, and a shift in travel patterns with many consumers now shifting to driving over flying to their destinations. New car dealerships suffered due to an inability to produce new vehicles, while the used car inustry, CarMax included, maintained an exceptional online inventory of used cars, and was able to meet consumer needs.

Moving into late 2021-2022, our analysis showed increased used car prices, with more stimulus funding and further supply chain disruptions among the factors affecting them. But we also found that traditional “supply and demand” rules were not at play. While a significant inventory drop did cause CarMax prices to soar, stabilized supply didn’t result in a lower price point. In fact, according to a 2022 Kelly Blue Book press release,2 research shows that “new-vehicle ATP increased to $48,182 in July 2022, beating the previous high of $48,043 set last month. July prices rose 0.3% ($139) from June 2022 and 11.9% ($5,126) from July 2021”. The report also showed that in 2022 “New-vehicle buyers remain in an “over sticker” market, paying above MSRP every month this year”.



  1. To highlight the usefulness of having immediate access to used car sales data through our CarMax data collection, a data model backtest was performed to show that CarMax used car sales data can be used as a leading indicator of future US BLS Used Car and Truck CPI. Several models were tested, from basic GLMs to more advanced Random Forests; ultimately, a XGBoost model was found to perform best. Testing the model’s accuracy using CARMAX sales data from 60-day (2-month) prior to the posted CPI data, the model performed with a coefficient of determination of 0.96. Backtesting this model over the last two years of CPI data confirmed the validity of this approach and made an excellent use-case for the value in CarMax sales data as an accurate leading indicator to future CPI index values.

  2. In 2019 CarMax daily inventory was around 80,000-100,000 cars within their database. When the pandemic began, we saw inventory drop to nearly half of 2019 numbers before steadily rebuilding over the course of a few months. However in Q2 2021, we saw an even larger plummet in inventory, which prompted the prices to soar to new levels even though inventory caught up to demand.

  3. In 2022 the inventory levels bounced back to pre-pandemic levels, however, the average vehicle price stabilized at a price point 50% higher. In the chart 2 on the previous page, you will find that even as more vehicles were added to CarMax’s inventory, pricing continued to rise, debating the theory that shortages drove higher costs due to demand.