NEWBURGH, iND. − As an engineering student at the University of Southern Indiana, Jordan Porter never lost his love of cars.

He hung around Larry Rose of Larry’s Automotive and learned tons about cars by osmosis.

Instead of becoming an engineer in “the real world,” Porter started his own dealership, Porter Automotive, also in Newburgh, in 2015.

“First off, I’ve always been a car person,” he said, noting that Rose got him started in 2009-10.

He asked Porter to help out when he had time off from classes.

“All through college he taught me a lot,” said Porter, who started buying and selling used cars on the side.

He looked through Craig’s List and began fixing them up.

“It helped me support myself and pay tuition,” Porter said. “I graduated with an engineering degree.”

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But the lure of working with cars was just too strong. He enjoys what he describes as the thrill of the hunt, finding used cars and fixing them up.

“I went to a ‘Y’ in the road,” said Porter, a 2008 Castle High School graduate. “I was either going to be an engineer or own my own car dealership.”

Used car prices stabilize

A study in the fall of 2021 by car search engine iSeeCars.com found used car prices in Evansville had risen 37.6% − $9,361 − since August 2020, while the national average had increased 26.2%. The price hike was connected to a global shortage in microchips that was slowing production of new vehicles.

After peaking roughly a year ago, used car shoppers are getting some relief. The average used car sold for $27,143 in December, according to the Kelley Blue Book. That's down about $1,000 from December 2021.

Wholesale prices dealers pay for used cars have been falling for months. The nationwide supply has returned to pre-pandemic levels, although dealers say they still have too many expensive, new models and not enough older cars that sell for less than $10,000.

In 2021, Porter sold 80 vehicles. He had sold 64 through the end of November. Inventory levels were lower last year; he usually had around 25 on the lot at one time, compared to 30 in 2022. Porter noted that only about half his inventory is actually listed for sale due to reconditioning.

“Most of my vehicles have around 100,000 miles (on them) and need things fixed before I sell,” he said. “New cars are now becoming more readily available and new car dealerships are starting to slowly fill up.”

Porter said the prices on used cars have come down approximately 15% the last six months.

“This drop is due to more supply of new vehicles and rising interest rates,” he said. “This business has fairly small margins compared to other businesses, so this market drop has made it tough for us dealers to be as profitable over the last few months.”

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Carvana, an online used car retailer, showed a $1.5 billion dollar loss in 2022 due to the market drop.

Inflation has continued to cause headaches for dealers and buyers alike.

“My dealership mainly deals with affordable used vehicles and I’m still finding it difficult to get my hands on quality vehicles at a fair price,” Porter said.

Recovering from pandemic

When COVID-19 started spreading in the spring of 2020, the car market quickly dropped.

“A lot of people stayed home,” Porter said. “They didn’t want to do anything.”

Auto auctions were canceled.

“We still sold vehicles, all online,” he said. “Auctions opened back up in the summer. Prices went up. That’s why cars still cost so much.”

Unfortunately, he said current prices might be the “new normal.”

“We’re still feeling the affects of the parts shortage,” Porter said.

COVID drove prices up 40 to 45 percent.

It was a struggle to get inventory for many businesses and a lot of used cars, he said, underscoring that inflation hit the car business earlier than others.

Interest rates are regulated by the federal government.

“This year, I would say in the last six months interest rates have basically doubled,” Porter said. “When the interest rates are 4% a customer could afford more of a car than when interest rates are 9%.”

“But prices have dropped from (2021). There’s been a 15 to 20% percent drop over the last year.”

Through all the tribulations, Porter loves what he does.

“My passion for cars has turned into a business,” he said. “Always a new experience and challenge. I enjoy the hunt for a nice used car at a good price.”

This article originally appeared on Evansville Courier & Press: Porter has engineering degree, but his love of cars takes precedence