Why do cars loose so much value when you drive them off the lot?

We all know what happens when we buy a car and drive it off the lot. The value decreases dramatically by merely rolling the tire over the curb. That just cannot be right. Why does this happen? Why is the cost SO dramatically affected by such a small amount of time off of the lot?
When a car is purchased, it doesn't matter how long it's owned, it's now a used vehicle. We don't know who has technically had it in their possession. We don't know what has happend to or in the vehicle, and therefore, it isn't worth as much. For all the next buyer knows, the car could have been involved in an illegal activity, drugs, an accident, a theft, or even something illegal that the buyer isn't interested in (such as smoking, small children, food in the car, etc.).
Secondly, the car has an increased likelyhood of having been driven in a manner that is hard on the vehicle. It is likely that the warranty isn't collectibe or useable any more. People would prefer, if they're going to pay that much for a car, to buy it off of the lot with a new warranty. Why would they risk buying an expensive vehicle that could have previously inflicted problems and the costs that come along with such problems? They wouldn't. That's another reason that the car goes down in value so much by merely buying a new car.
I think that the final reason that the value decreases so much is that people like the word "new." Why would anyone want to buy a used car for the same price as a bran-spanking new one.
I guess that it really does make sense that the vehicle looses so much value by being purchased. It can just seem frustrating for owners of used vehicles that are in excellent condition, and wonderful for those who want to buy those lightly used cars. Oh well. It all makes sense now, and I am just happy because I am done with third term blogs!!!! (Even though this one was a day late). Love ya'll. Bye.