Low end car flipper here, it really depends on what slice of the used car market you're talking about. Think about what kind of people buy what vehicles, the kind of money they have and where the supply of those vehicles comes from and it all makes sense IMO.
Used cars are an immensely diverse range of "products". You've got $500 Aveos that Jimbo or Manuel will have no regrets hauling an I-beam on the roof of, you've got $25k 25yo 4Runners that 25yo software engineers with six figures of salary and minimal expensive responsibilities will talk themselves into paying asking price for because it's what they grew up getting dragged around in.
The market for anything new enough to get a loan on is always inflated, obviously, that's what easy financing does.
For the last 4yr or so the bottom the the market, non-japanese compacts and subcompacts with 15k+, 90s junk that needs work, Altimas in perfect condition but with a time bomb CVT and 80k on them, etc, unfashionable midsize SUVs from the '00s was just fine. You could pick up running, driving, has one or two known mechanical issues that need to be addressed 10-25yo vehicles for $1500 all day long, non-running for even less.
The market for low mile, low flair, A to B commuting and family hauling vehicles in good cosmetic condition that people who think "good schools" means "no poors" and worry about what their neighbors think of their lawn buy for their kids to go to college in or slightly less well off kids have to buy for themselves after college were what was inflated, like 5k+ for a Japanese crossover from '01 with 250k on it inflated. These vehicles have become less and less common because the white collar upper middle class crowd that keeps things nice but changes cars decently regularly has been leasing more and more.
If you were wiling to clean the ever living crap out of a kid-stained interior or get some cosmetic body damage fixed (or just ignore it and live with the ugliness), or (get your pearls ready folks), , drive a domestic that isn't a pickup, you could get cars of the same, age miles and mechanical condition for $1500-$3000 instead of $4k on up. These vehicles are plentiful because the middle class has been buying them CPO off lease and using the piss out of them hauling around their families, commuting a ton of miles, etc, etc and then ditching them for another one when they feel they are too old/beat. This is the niche I specialize in and I think these vehicles are a great value.
Basically the stuff that white collar professionals feel is the bare minimum of what they or their kids can drive without looking below their class has been ludicrously overpriced because (surprise, surprise) those people have a decent chunk of change to throw around and supply has been dwindling.