There are multiple reasons.

1) A large segment of people make purchase decisions based on payment schedules rather than the total cost of driving or even residual value.

2) Today 2/3 of car loans are are 72 months, meaning that even for lower depreciation rate cars, private sellers are often under water, and may not have the resources to pay off the gap with current market value. [0]

3) Banks have responded with 1/5 new-vehicle loans being 84 months or longer, adding to the problem

4) For around the ~40 years I have been paying attention, private sellers almost always think they should get the dealer price and not the private party price.

There are other reasons, but we are in a situation where it would be amazing of we avoid another 2009 like crash in the market.

[0] https://www.edmunds.com/industry/press/underwater-and-sinkin...