ATLANTA — Tracking used car prices is enough to give anyone whiplash.
Since the start of the pandemic and the resulting disruptions to new car supply chains first sent prices soaring, used car prices posted their largest annual increase on record — up 45% in the 12 months ending in June 2021, according to the Consumer Price Index — before swinging to a 12-month drop of 8.8% in the most recent reading for December.
That was the biggest 12-month plunge in prices for used cars since June 2009, when General Motors and Chrysler were both in bankruptcy proceedings and the economy was hemorrhaging a half-million jobs a month.
"It was a completely wild ride," said Ivan Drury, director of insights at Edmunds.com, an online resource for inventory and information on cars.
Data from Edmunds shows the average price of a used car purchase in December at $29,533, down nearly $1,600 from the record high of $31,095 reached in April 2022. Today's average used car price is about the same as the average new car price as recently as 2010.
While the prices of late-model used cars are down only 5% off their peak according to Edmunds, the price of older used cars, those five years or older, have fallen 15% or more from their peaks early in 2022.
Experts say reasons for the decline include higher interest rates that make it more expensive to finance a car purchase, limiting demand. CarMax, the nation's largest pure used car dealer, has warned that the combination of high prices and high-interest rates is creating an affordability problem for many buyers, hurting overall demand.