Used car prices drop after record-high pandemic prices

If you are looking to buy a car, now may be the time to consider buying a used car.

Prices for used cars are dropping after they soared during the pandemic.

That's down nearly $1,600 from the record high of $31,095 last April.

The reason? There's more inventory and less demand.

UNC Economist Gerald Cohen said it's the reverse of what we saw a year ago; there's more inventory and less demand.

He said higher interest rates also factor into why there are more vehicles on the market.

“Demand is slow because of higher interest rates and higher car prices and general inflation weighing on consumers," Cohen said. "And then at the same time, supply has now increased as shortages have abated."

With a possible recession looming, Cohen said used car prices could continue to drop.

Depending on how you look at the situation, there's some more good news. Analysts said consumers are paying less than sticker price for newer vehicles.