Your point is well taken, but I'm quite certain the numbers you used overstate the case significantly.

The "average american car" doesn't depreciate 10 grand in the first year, because the average American car costs ~$24,000, and there's no way the average car loses 40% of its value in one year. I'm sure there are outliers that will lose 40% in the first year, but there's no way it's the average. From the Googling I've done, I think a more accurate figure is 20-25% for the first year, and about half that for for years 2 and 3, so probably 50% after 3 years and 45,000 miles.

So, as an example, let's take that average $24,000 car. In the first year, I fully expect it to lose 20% ($4,800) , and wouldn't be surprised if it loses 25% ($6000.) By the end of year 3 (when the factory warrany runs out) I would expect it to have lost 50%, or $12,000. Average that over the 3 years and you have $4,000 in depreciation per year, not $10,000.

The other bogus number is the insurance. $3500 is way higher than the average new car insurance policy. When I drove a brand new 1999 Mustang, as an unmarried 21 year old, with a very spotty driving record, in the 5-county Philadelphia area (very expensive auto insurance region) I was paying about $200/mo, or $2,400 a year. Googling for the national average led me to this AAA page which puts the average full coverage new car policy at $1,600.

To be fair, more Googling says that even your used car insurance number is too high, as the average policy (counting both new and used) is around $700... So I'll go lower and say that $500 is the average used car insurance (something has to be pulling down the average from $1,600, right?)

I won't dispute the other numbers, so let's re-run the comparison:

Depreciation...............$4,000
Gasoline......................$1,500
Insurance.....................$1,600
Repairs........................$0
Maintenance................$150
Miscellaneous.............$200
Total:.............................$7,450

Cost Per Mile: $0.49

A quick look at the AAA link above shows our simulation is very close to their own estimate for total cost/mile of a new car, which is $0.56.

Now, for the used car example...

Depreciation...............$ 500
Gasoline......................$1,500
Insurance.....................$ 500
Repairs........................$1,500
Maintenance................$ 300
Miscellaneous.............$ 300
Total:............................$ 4,600

Cost Per Mile: $0.30

Still a significant difference, of course! But your fuzzy math makes it look like you have to be a complete moron to buy new, which is not the case. To many people, there is value in having to worry less about breaking down, not having to pay for repairs for 3 years, and, yes, the joy of owning a new car. Apparently, that value is about $0.15 a mile, or about 3 grand a year. As someone who owned 5 used cars before he bought his first new one, I consider myself one of those people.

The defense rests, your honor!