After posting this as a comment, it occurred to me that it could be useful as an instablog for those thrifty investors who would like to drive a new car every two years for the cost of driving a used car, without having to pay for any repairs or service.
The below information applies to the Volkswagen Jetta TDI, and the numbers are verifiable by way of Edmunds.com, kbb.com, autotrader.com and fueleconomy.gov.
In 2006 we paid $22,600 cash plus tax for a 2006 Jetta TDI. We put on 39K miles, averaged 39 MPG. We traded it in on a new 2009 Jetta TDI, $23,900. Dealer allowed us $19,500 trade-in, we paid $4400 plus tax of $264 = $4664. We received a tax credit of $1300 at year end. Total out of pocket for new TDI was old car plus $3364.
This saved us $500 on 40K mile service, $400 on tires, $300 on new brakes, all repairs were under warranty, and gave us a brand new TDI with new 50K mile warranty and 3-year free service.
Total for 2 new TDI's (one at a time) was $22,600 + $1356 tax + $3364 (tradeup cost) - $1200 (tires, brakes, service we avoided buying) = total of $26,120, or $13,060 per car.
A competing dealer has now agreed to limit our spread to $3000 every 2 years. So we'll be trading up at year's end on 2011 TDI Jetta for $3180 tax incl., again saving us 40K service of $500, tires at $400, brakes at $300, and another brand new car with ANOTHER $1300 tax credit. Total for 2nd tradeup is $3180 - $1300 tax credit - $1200 maint. costs = $680.
Total cost of 3 BRAND NEW Jetta TDI's (one at a time) = $26,800, or, drum roll... $8933.33 per car!
Did I mention they average 39 mpg, which cut our fuel cost in half compared to our mini-van that averaged 17 mpg? (saves $1800/year on 20K miles, a 7.5% return on the original $22,600)
The Jetta is the best car we've ever driven, with the smoothest transmission in the world, and better mileage than any car except a hybrid. And the car keeps getting better with each revision. It also holds the record for best coast-to-coast mpg average at 58 mpg, better than any hybrid. (our best hiway mpg has been 54 mpg).
Disclosure: Disclosure: No position in Volkswagen or any car company.