I phrased it like this to a friend who was looking to buy an upgrade to a relatively new car: "What I paid you $1000 a month (his new car payment) to drive the old car?" When I put it in that perspective, he drove that car for quite a while longer.

Personally, I buy new, and keep putting my car payment into a savings account once it is paid off. If I can't afford to put that money into savings, I can't afford a new car payment. I'm only allowed to do non-routine repairs from those funds. It's amazing how much you don't want to crack into that for a car once it grows to a few thousand. It's the most powerful visual impact of savings I've come across.

Car payments have a way of disappearing into an upgraded lifestyle when you don't have to make them, and then they come out of savings when you take a loan for the car.

Honda Civic may be the ultimate car for that. I bought a pickup 8 years ago that I hope will be a 20 year car. Buy something with a reputation for 200k+ miles.