This should be an easy one, right? I know the theory, and I'm familiar with all those fancy colorful graphs depicting the massive 25-30% depreciation of new cars in the first two years of ownership. However, this doesn't seem to reflect what I am seeing out there, and my maths tell me that I might be either better off or at least not any worse off with a brand-new car rather than a used one. And since I can't really believe this to be true I'm asking the swarm: where have I gone wrong? Please keep in mind that I did not take financing, average ARP new vs. used, stock market returns, etc. into consideration as that would open a whole new can of worms. The following prices are thus cash only.
Here are the basic premises of my calculations and some background. Five years ago I purchased a used 2006 Kia Sedona minivan that has now reached the point where it might no longer be financially sound to fix. The airbag light is on, the A/C has once again stopped working properly, and the TPMS system is wonky and flashes a warning light every now and then. I don't really care about the TPMS as I am perfecty capable of inspecting my tires regularly but the defunct airbag will keep me from passing the safety inspection and a working A/C is absolutely crucial here in Central Texas. This isn't a case of mildly uncomfortable, it can be life or death. Quite literally, especially with a 2-year old in the car. I no longer need a minivan but will require something that will be comfortable on long trips with the family, and my wife insist on driving something where she sits higher up than in a regular sedan (can't blame her with all those overcompensating flashy pickups and giant 7-seater SUVs around) as she simply doesn't feel comfortable and safe in a regular car. I was therefore thinking small SUV, aka Toyota RAV4, Kia Sportage, or Honda C-RV. Brand-new and with titles, taxes, and registration these go for around $25k-$36k depending on trim level. Given average assumed depreciation of say 25% over the first two years I would expect used 2019 models to go for between $19k-$27k. Yet the prices I see online by both private and commercial sellers (I've checked and compared Autotrader, Carmax, Carvana, and Craigslist) are in many cases barely any lower than brand-new ones and in some rare cases even higher. I have to go back at least 5 years and 50k miles to notice a sizeable difference in asking price that would amount to the 25-30% depreciation I would have expected of 2-year old models.
And here's where my brain starts spinning wildly out of control. Based on the cheapest currently available 5-year old Toyota RAV4, Honda CR-V, or Kia Sportage with less than 60k miles within a 200 mile radius the depreciation for these cars after 5 years seems to average at between $10,000 and $12,000. Go back another 5 years and they seem to lose another $10k in value. Coincidentally, that is pretty much exactly what my current minivan has cost me in total over the last five years including repairs: $8,500 purchase price + $4,300 in repairs - $1,500 residual value = $11,300.
In other words: if I buy a brand-new car it will lose around $10,000 over the next 5 years. If I buy a 5-year old car it will lose around $10,000 over the next five years. If I buy a 10-year old car it will lose me around $10,000 over the next five years.
Clearly, my brain took a wrong turn somewhere but I cannot figure out where and how. Any help?