[craiglittle]

This makes sense to me. The average age of cars on the road has increased by 10% (~1.5 years) in the last decade, reducing the number of new cars needed to maintain equilibrium.[1] Wealthier people buy new cars (and pay the absurd premium) which then trickle down to the rest of the market through secondary sales.

The reality is that a five-year-old car today is most likely more reliable than a new car built 25 years ago. A similar dynamic can be observed in the cell phone market.

1: https://hedgescompany.com/blog/2022/02/how-old-are-cars/

[bkjelden]

The premium isn't really absurd the way it used to be.

Across a number of segments, a 3 yr old used car with 30-50k miles will still bring close to 90% of its original MSRP on the used market.

Gone are the days where a car lost a third of its value when you drove it off the lot (for most segments).

[CraigRo]

You've had extremely high inflation over the past 3 years, along with a shortage of used cars. I had one totaled during peak insanity and got 7% more than I bought it for (used) 6 years earlier. But real (inflation adjusted) depreciation curves are still in existence, if slightly flatter as the cars have become more durable.