I wish I had saved a link to it, but a study on affordability marked an average earning household of about $35k/yr as being able to afford an $8,000 car. In order to be able to afford the "average" $33,000 car took a $90k/yr income.
My household income is way more than that and I still found it painful to buy a $20k car. I find it hard to understand why people buy cars at such high relative prices.
People, like myself, don't want to buy into someone's problems. Sure you pay a bit less, but you also have a bit less car. 35,000 miles into a car, how long before you need to buy just another used car? I buy new, and then run it into the ground after the warranty runs out. Typically by then, normal defects have been covered. Change your own oil, filters, tires. Keep up with things like alignments, wash/wax, and keeping things clean. You'd be surprised at how long a new car will last if you take care of it. Conversely, who knows how the previous guy treated it, because most definitely do not care. This will be the seventh year with mine, and it's immaculate.
A bit less, or maybe a lot less. If you're buying an used car, you take your time to look for signs that tell about how well it's been taken care of (or abused). And of course you take it for a test drive. I don't think there are that many critical (as in very expensive / impossible to repair) defects that you can't spot by looking, feeling, smelling, and listening.
In my case, I got my newest car just a few weeks ago. For the price of a battery and a tank of gas to drive it home. It's only 20 years old and runs great, has 230k km on it, and will likely last at least double the kilometers, possibly much much more, up to around 1000k.
I could get a dozen used cars in the $0 to $1000 range and still have $15k or more for repairs before I've spent as much as the average new car costs.
As I'm not a mechanic, I'd rather not deal with it. You sound like someone who enjoys tinkering around with cars. The time you spend keeping a car with 230,000km on it running, I am spending doing other things. And unless that previous owner was obsessive compulsive, it's certainly going to have some funk after that amount of time. I want a car to provide its purpose, with the least path of resistance.
Agree about used vs. new, but I am comparing a $20k new car vs. a $35k new car. Maybe I should be factoring in the type of car here (sedan vs. truck) but otherwise, the only thing the new $35k car has over my $20k new car seem to be frivolous luxuries. Now that I think about it the type of car must be accounting for a lot of the difference.
It's easy to understand why people overextend themselves on vehicle purchases that they really can't afford:
One is to feel "safer" in having a newer vehicle, especially if it's still under warranty.
The second is simply peacock presentation of showing they've spent more money than you'd think they could afford otherwise.
I guess some might simply be a mega-fan of a particular car model and go for it even when it's outside of their financial means, but I haven't seen that very often out of people in average income brackets.
For the vehicles I've been looking at recently (minivans, light trucks), buying a 2-3 year old vehicle with ~35k-50k miles doesn't make sense-- I was seeing savings of at most $2k-$3k, and over the (minimum) 10-year lifespan of the vehicle for me, having a warranty and complete service records was much more appealing.
