Why Used Cars Are Still So Expensive

I was listening to a podcast and they broke down why used car prices are still so high. Three things stood out:

The price waterfall — When new cars get more expensive, used cars tend to follow. More people get priced out of buying new and start looking used instead.

The pandemic still matters — Fewer cars were produced during the pandemic, which means fewer of those cars are entering the used market now. That supply gap is still working its way through.

Affordable new cars are disappearing — Manufacturers are making fewer cheap, entry-level cars and focusing more on expensive models and trims. So people who would've bought an affordable new car are being pushed into the used market.

Basically, the affordable alternative is getting more expensive because more people need the affordable alternative.