The prices on luxury import vehicles drop like a rock because a huge percentage of these vehicles are leased. It's not necessarily that people are afraid of the repair costs but more so that a lot of people can't even truly afford to be driving those vehicles if leasing wasn't a viable option.
I agree with you about the leasing but there are plenty of people that can afford a used luxury car. I do think a lot of people think it's insane to spend $35k on a used car when you can just get a new car for the same price.