<prompt> Human: Popular opinion holds that new cars lose a quarter of their value the moment you drive off the lot, and sources like Edmunds claim 15-25 annual depreciation after buying a new car. So then why arent 5-year-old used cars half the price of the current model year?Is this an illusion based on the way that new cars are advertised? In other words, am I tending to compare base model, no-options new cars to used models that probably were purchased with some upgrades? Does the relationship between the used and new car markets fluctuate significantly from year to year? Or is it confirmation bias on my part, because used car prices have such high variance? Perhaps Im tending to ignore those that are in worse shape and focus on those with clean histories, shifting my perception of the mean.I have lots of guesses but little information. If you twisted my arm Id put money on a combination of all of the above, but Id love some expertexperiencedinsider opinions.EDIT: Heres an example of why Im skeptical about the loses X of its value as soon as you leave the lot saying - I just received an email quote from a Toyota dealership that included new models at the top and pre-owned alternatives at the bottom. One of the pre-owned vehicles was shown as 1,300 more than a new vehicle of the same model year and a lesser options package. EDIT2: The used car has 10k miles on it and a less desirable color as well. Wow.  <response>: People pay a premium for a used car that wasnt beat to hell. So a lot of the ones youre probably attracted to are going to be on the higher end. Most people also build in a little room for negotiations in their asking prices and if they get a buyer dumb enough to just meet the initial price, so be it.The advertisements are always for the basest of base models. Cheap, low end options. Manual door locks and windows, that kind of thing. Theyre options that very few people actually ever buy new, and as a result destroy the resale value if you try to get rid of such a clunker. 