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Cars cost more than ever, and people hold onto them longer than ever. I think the average is 11 years for ownership now, so a slightly used car is harder to find. I've also notice that 3-yr old cars seem more expensive and in some cases, it is just better to buy new vs used, so its not such a clear-cut money saving decision as it used to be.
The longest my parents ever held onto a car ( GM) was 9 years and even when helping my brother and I through college, they went from '65'-73'. When you hit 60-80 K , the car was considered "old". Now, I am driving a ' 05 Deville with less than 60K and baring a wreck or sudden costly problem, I don't plan to trade for a long time. No need. BTW, wife has a '09 Lexus which not even 30K . Just having regular maintenance.
Depreciation rates and used car prices will likely normalize over the next few years, due to two factors:
1) New car sales increased dramatically from ~2011-present. Lots of off-lease used cars will be entering the market soon.
2) Safety features and semiautonomous technology are quickly trickling down to inexpensive vehicles. When you can get a new Hyundai Elantra with adaptive cruise control, CarPlay, lane keep assist and a boatload of other tech for less than $20k, a three-year-old Accord with none of this stuff looks a lot less appealing, at least to the average car buyer.
Multiple factors, most of which have been pointed out. The cash for clunkers program jacked up the prices on lower end used market, and it never did return to previous levels. That moved all prices up the ladder a notch or two, which has been sustained by the manufacturers limiting the rental and fleet production, propping up used markets residual values.
Bottom line is, free market has held up higher prices for the used market and no end to it is in sight. Biggest gain has been in large SUV and truck market, where values remain significantly higher on the used market than ever before due to popularity combined with low gas prices. Welcome to the new world. Buy new if it seems that close in your perception.
That cash for clunkers thing the gubmint did a few years ago took a lot of used cars off the market. That surely didn't help the market.
That was back in 2009. Those cars more than likely wouldn't be on the road today anyway.
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