I don't know that you're considering a couple things: 1. people are locked up not just to punish them since they committed a crime but also to keep society just that much safer from that criminal and 2. you assume most people have sufficient insurance to replace their stolen vehicle and that they have alternate transportation to get to their job or to pick up/drop off their kids. I know folks with liability only insurance that just barely scrape by and if they didn't have their car for just 1 day they wouldn't be able to do the things I listed.

Criminals do work in prison as well such as producing goods (various forms of apparel) or performing services (landscaping and picking up trash). Considering they're not entitled to minimum wage, their cost of labor is extremely low and one doesn't need to sell a given product for much of a high price at all to make a profit. That profit gets reinvested back into the economy in one form or another so I'd argue the taxpayers are getting most, if not all, of their money back.

Furthermore, those who resort to stealing cars seem to have decided they're not going to get an honest job and since the car-stealing business probably isn't very consistent compared to working a retail job then I'd argue they don't have the requisite history of pay that affords them the ability to repay their debt to society.