Late Stage Capitalism
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To be fair, those cars don't just get set on fire when they're done with them. They're supplying the used car market.
It's a terrible idea financially, but it isn't actually wasteful.
The demand from it does make car manufacturers to produce more cars. It also floods the market with newer cars, causing older ones being phased out from use earlier
Any car that runs will be driven until it no longer runs
It's more about what happens after it stops running. If used cars are scarce and prices are high it makes a lot more sense to do that expensive engine repair. If used cars are cheap, you get more repairable cars going to the wrecker.
I question how well someone who knows they won't keep their care for long takes care of it over the limited time of ownership.