The people buying a new car every 3-5 years are doing it because they can sell it at the end of that period to recoup some of that value. If the resale value goes down, the calculus on buying new cars changes.
Exactly. If you have a car that’s worth $10,000 more after five years, then that car can be priced such that it sells for more when you sell it the first time. How much more? Not the full $10,000; it depends on the discount rate - a 4% (real) rate, competitive with the stock market, suggests about $8000 more. And the reason the car has value 5 years out is that it’s still good for another 5-10 years. that driving value is the ultimate reason people buy cars at all.
No, a consumer won’t do that kind of calculus, not directly, but a leasing firm sure will.
Clog up downstream and it will affect upstream.