It's risk vs. reward, to many people the increased cost of a brand new car is worth more than the risk of buying used.
Also, if you buy a car thats 2 or 3 years old you can actually figure out what is likely to go wrong with it, something you generally don't get with new cars (unless you're buying a model is about to be refreshed)
I generally find the maintenance required to keep the warranty generally exceeds the cost of repairs that might actually happen. It's not exactly rocket science to change air filters, oil, transmission fluid, and brakes.
The other thing about cheap used cars is when they break, you get a new one. I'm not going to spend $2k on a new engine, I'm going to buy a new car for $2000-4000.