Why would I change to a new car (with new loan) when I can use it for free after I fully paid for it?

I think it could be related to reliability, warranty, depreciation and maintenance costs. I used to drive but not anymore.

Depending on the usage of the car, some people like to change new cars as the new cars come with warranty and there could promotion offers etc. Also the wear and tear parts that need to be replaced if failed could be quite expensive.

Some people also like to do preventative maintenance to replace major parts proactively at the fifth year and will consider if a newer car offers better value.

Some people look at the depreciation cost per year and might find a newer car has a lower depreciation and operating costs.

It depends on your usage of your car and the maintenance regime.