Originally Posted By: HTSS_TR
I think Camry and Accord depreciate at a lower rate around 10% with 12k miles a year. I think MSRP of 2005 Camry LE was around $19k, so a 2005 with 84k miles is valued at $9100 today. Since the car has 100k miles so a reduction of $1600 from $9100 make it $7500. But the owner didn't accept the offer $8000.
They must have plenty of buyers in the market who simply don't have the means to acquire a new car at any price. The problem with a 10% depreciation rate is that the original owner gets half the value back after 80k and almost 7 years of use. If sold at that point, the second owner only starts to save money through having bought used once the car is at 160k and over 13 years old, assuming no major repairs are required before that point. Even with just typical minor repairs, the second owner would probably have a 15 year-old 180k car before they reach the point that the unit cost is the same as that of the previous owner, who got to enjoy selecting and owning a brand new car with full warranty and likely very few problems.
13% is where the original owner pays half the value for the first five years and 60k miles. Until very recently, it was exceedingly rare for a used vehicle to have that sort of wholesale value. Even Toyota and Honda typically averaged 15% to 17% depreciation rates in recent history. But that would include the disintegrating vehicles in north-eastern regions. If vehicles in your region typically have plenty of good life left after 15 years and 180k miles, unusually low depreciation rates might make sense.
http://www.thetruthaboutcars.com/2009/12/kbb-resale-values-japanese-lead-americans-gaining/
http://www.thetruthaboutcars.com/2008/11/compacts-top-residual-value-survey/
Of course, the time value of money will also make the used car more favorable. This becomes pretty significant to someone with high-interest debt or high-yield investment opportunities.
Using equivalent new values rather than original MSRP will help account for inflation. At times, in some countries, inflation reached high enough levels that used vehicles would sell for more than the original new sale price!
Just some thoughts to consider from my amateur perception of a complex market.