That's because people with less money aren't buying new cars. Because new cars are unaffordable. If they were affordable, then more regular folks would be buying them and they would be buying the base models too.
Yeah I'd rather lose money on my 5000 used car than a brand new 30,000 car.
Depreciation is still about 20% in the first year, and nearly 50% by year 5 of owning a new car. Also assuming most aren't buying outright and then your also paying interest on a loan.
So my used 5000 car might depreciate to 2000 in 2 years. That is still way better than going from 30,000 to 24,000 in 1 year and then to 15,000 in 5.
Ehhh those figures are including outliers, like luxury cars, that do tend to depreciate like rocks, which I why I added the qualifier "average" in my reply.
If depreciation is all you care about then yeah, go for a $5k used car but if you care about total cost of ownership, that probably isn't the best move.
If you're spending $5k on a car, it's probably because that's your absolute limit and not because it's the best financial move.
My 21 Honda Civic I bought new for $23k is worth $18k today 5 years later. I also bought a better trim that included adaptive cruise control and remote start since I needed that in Wisconsin winters
61
u/ThiccFarter 10h ago
That's because people with less money aren't buying new cars. Because new cars are unaffordable. If they were affordable, then more regular folks would be buying them and they would be buying the base models too.