Let me give you an example that disproves that it pays to buy used cars If you can afford to buy new cars. I have been buying a new V8 Mustang GT convertible every two years since 1999. The only thing I pay for is fuel and one state inspection, the dealer provides the three oil changes required over two years, for free.
I owed a '99. '01, '03, '05, '07 and currently have an '09 for two weeks, for which I paid a total of $5,000 to drive home. The '07 cost me $3,900 to drive home. The guy that bought my used '05 just traded it on my '07 a few months after paying nearly $1,000 for tires, and it cost him $6,000 to drive it home. You do the math
I do feel comfortable simply keeping my expenses low (hence driving very old, fully depreciated vehicles) and trying to keep some savings, but I fully realize that my savings is essentially worthless. If I get to the point where my savings account grows larger than what I need to maintain a comfortable amount of very liquid assets on hand, I'll have to start investing the excess, because it would be stupid to just leave it sit there.
Of course, a vehicle is almost never an investment, and depreciates like mad for the first couple years, and *that* is the point that many consumers don't seem to understand. The drop in large vehicle prices is only emphasizing that, not significantly changing the reality of the situation.
nate