SUVs and luxury cars saw the biggest price drops during the first 15 days of the month, but compact cars, midsized cars, vans and pickups also noted declines.

At the same time, new and used car inventories are starting to improve, but increasing interest rates are making vehicles less affordable for consumers overall.

iSeeCars's Car Affordability Index found that the affordability of new cars dropped 13.3% from August 2019 to August 2022, while the affordability of used cars fell 26.7% during the same time. Record high prices on used cars are a big part of the problem, but with the Fed aggressively raising interest rates, car payments are becoming even more difficult for many Americans to afford.

iSeeCars Executive Analyst Karl Brauer noted: "Due to supply chain shortages and increased demand, the rising prices of new and used cars have outpaced income growth. From August of 2019, well before the pandemic lockdowns started, to August of 2022, new car prices increased by almost 29 percent, and three-year-old used car prices increased by 52 percent."