GRAND RAPIDS, Mich. (WOOD) — Car prices remain high after years of challenges for the automobile industry brought on by the pandemic.

Prices skyrocketed to record highs after the pandemic due to production stoppages and supply chain issues. With fewer new vehicles around, more people turned to used vehicles, causing those prices to rise as well.

Today, prices haven’t gotten much better. Used vehicle prices are 30% higher than before the pandemic, according to recent J.P. Morgan research.

“It’s still tough on both new and used,” Mike Wall, an auto analyst with S&P Global Mobility, said.

The average price for a new car is nearly $50,000 or nearly $800 a month, Wall said. That’s pushing even more consumers into the used car market, keeping prices high there too.

“We saw some drop-down in used vehicle pricing late last year, but we’ve given some of those gains back in recent months,” Wall said. “Again, I do believe in many of those cases it’s because we’re moving some of those buyers from the new vehicle market to the used.”

Wall explained that many new vehicles that are available are higher-priced, a move by automakers to maximize profits.

“They tend to be a richer mix, they tend to be the pricier vehicles. If you’re only able to build a certain number of vehicles, you’re gonna build the pricier vehicles to get as much margin as you can,” Wall said. “So we’ve got a bit of a mismatch here. We’re starting to bring buyers back into the dealerships, but they’re not in a position to be able to buy at those elevated prices.”

Still, he says there’s hope on the horizon. Automakers are producing more vehicles and dealerships are getting more used cars on their lots.

“I think as the spring selling season really kicks in, automakers are gonna have to grapple with too tall of inventory in some cases,” Wall said.

Production is on the upswing as supply chain issues and a shortage of essential semiconductor chips have both improved, although not back to pre-pandemic levels.

“This year versus last year, we’re certainly in a much better production environment,” Wall said. “Much better supply and availability. We’re slowly but surely starting to rebuild production on the case of new vehicles and that’s so important when they eventually become used vehicles.”

Wall also said more buyers are reentering the market this year with the average vehicle out on the road right now 12 1/2 years old.

As the industry recovers, Wall believes used vehicles could get slightly cheaper over the next year or two, maybe between 5% and 10%.

“You get to a point where there’s only so high you can go before it does start to come back down,” Wall said.

But don’t get your hopes up about getting a deal like before the pandemic.

“We will start to see some declines, but we were going up so fast for over at least the last two years going through the pandemic and the supply chain disruption that I don’t think we’re going to be seeing pre-COVID levels anytime soon if ever,” Wall said. “I think the market is just evolving that way. We’re kind of seeing this across the board in many different categories outside of automotive.”

Wall recommends expanding your search further out to get the best price possible.

“In some cases, we’re having to cast our net to a wider geographical range,” Wall said. “Looking out of state in some cases as well. It’s that sort of environment that we’re in. That’s gonna hold for the next 18 months to two years.”

In the meantime, with vehicle prices still high, Wall expects automakers to offer more incentives to buyers, like better financing rates, although he conceded that may be a challenge given high-interest rates.