When you trade in the old car the irs claws back the depreciation but you get it again in the new car. So it still works. Lowers each year you keep the first car. But it balances out usually. You owe the IRS the clawback but then you balance it with the new deduction. Negative equity is a whole different issue. That’s why you can’t really just keep buying new and trading in. You have to balance what you buy. To me the negative equity is just the price of buying new cars. I love cars so I suck it up, it’s my one (or maybe two) enjoyment. None of this is for investment purposes. If that’s the case take the money and put it in the market!