Been watching the used car market crash unfold over the past couple years and it's honestly wild how much has shifted from the pandemic peak. Prices that were absolutely insane just a few years back are finally cooling down. Used car wholesale prices dropped something like 13-14% in early 2024 compared to the year before, with luxury cars and compact vehicles hit hardest. That's a pretty major move when you think about how sticky these prices were.

What caught my eye is that the used car market crash didn't happen overnight, but once it started, different segments moved at different speeds. Luxury vehicles dropped over 6% annually while EVs depreciated around 16% year-over-year. Meanwhile, new car prices were also adjusting downward, though they're still sitting way above pre-pandemic levels. The average new car price was around $47,244 in early 2024, down about 2% from the previous year but still up roughly 30% since 2019.

The inventory situation is probably the biggest driver here. By spring 2024, many dealerships had stock levels 52% higher than a year prior, which forced them into heavy discounting. Some brands like Toyota, Honda and Lexus were actually struggling with shortages on specific models, but Dodge, Jeep and Chrysler had way more inventory than they could move. This imbalance created that buyer's market people were talking about.

What's interesting is that even with the used car market crash happening, used vehicle prices never fully returned to pre-pandemic levels because demand stayed relatively strong. Sure, affordability is still a challenge for most buyers, but the direction finally shifted in their favor. Incentives averaged around $2,787 per vehicle by early 2024, giving people more room to negotiate. The whole industry seemed to finally be normalizing after years of chaos.