I have been watching used car price in this long running threat and discussed the impact on inflation measure. Certainly it will bring inflation numbers down, but will not lead to deflationary spiral.
Yeap, for more than 2 years I am expecting the prices will mean revert, so far it is not. We had few years of supply chain disruption and it is still normalizing. One of the major supply source to the used car market is “leased vehicles”. This source is almost dry, thus the supply is constrained, the demand is steady, and high cost of post COVID, all are contributing.