Buyers can't make payments fast enough to keep up with depreciation.
Result, American buyers who like to trade every 18 to 24 months are forced to drive their vehicles much longer in an effort to build some equity and car sales plummet as a result.
Who'd even consider buying a one year old Tahoe if you can buy a new one with a lower payment? IMHO
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Truth be know, its actually out there, most people could drive a nicer car than they ever thought possible (if they choose to) by looking at exactly what you point out.
In actual fact you take a car with high cost but low depreciation and high resale and the true cost of ownership is very low compared to the Tahoe example. But people are most often fixated on low payment, loan term too long, zero down and get into the exact problem you sight.
In the past banks required 20% down and held firm (70's and prior) but now they'll let a customer get buried with zero down. With 20% down and a 36 or 48 month contract people could trade at 18 to 24 months, but where to get the next 20% down? For most those days are gone and won't return.
The person who would buy the one year old car rather than the new one is the one who doesn't care about what people think and has a secure retirement account and a new Harley in the garage with the extra cash they actually saved by buying the used one and paying it off much faster
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