Vehicles under $15k are 1.6% of the market, and their share of the market has dropped over 90% since 2019. The old advice that you can get a beater and drive it in to the ground for $5k hasn’t been true for years but it still seems pervasive in personal finance spaces.
I don’t know how long ago, if ever, a $20k new car was comparable to a $5k used car.
My first car purchase was in 2009: I got a 2005 Cavalier with ~40k miles for $8k. Cars cheaper than $7k were basically a couple months away from the scrap yard (unless you’re able to fix up a project car yourself, but I think that’s outside of the scope of this conversation). And even then: a $20k car in 2009 was a completely different class of car. A comparable car, the Cobalt, had a sticker price of about $16k. So, anecdotally, that’s a 50% discount in exchange for a car being 4 years old with 40k miles. Even that cavalier was a pretty terrible car that was both a bad experience to drive and costly to repair and operate.
I don’t think today you are ever seeing a $20k car being even remotely comparable to a $5k car. It’s not a $15k difference.
If the % was the same: of the choice was between a $20k new car and a comparable $10k used car, I think thats a close decision. The problem is that comparable used car is costing $17k or more. I think the conventional wisdom of buying used has swung too far and driven up the demand for used cars. I think the average buyer does not adequately factor in both the diminishing driving experience over time/miles and the increased repair costs into purchasing decisions. I also think that resale value is overvalued.
Of course, there’s other economic factors. Some people don’t have the luxury of choosing $20k vs $17k: they’ll take the $17k every time. I’m just talking about the decision making process for those who can make it.