New and used car prices soaring to new levels

(KYMA, KECY/ CNN) - Prices for new and used cars are soaring and they're not going to stop anytime soon as car dealer lots have only a fraction of the vehicles that they typically have.

That is helping send prices to record levels and lifting the nation's overall inflation rate. According to JD Power, the average new car price hit a record in May at more than $38,000. That number up 12% from the same period a year ago when many car dealerships were closed by the pandemic.

May's seasonally-adjusted sales rate for new car sales rose 34% compared with a year ago and up nearly 11% compared with the more normal sales in May of 2019.

But the demand is coming at a time when auto plants are closed or running at reduced production because of a computer chip shortage.

Strong sales and limited supply are what is feeding the price boom.