Depends on how much money you want to spend. I typically buy 3-4 yr old used cars. They generally have had a huge hit in depreciation, but have 10-12 years of life left. I bought our 2001 Forester in 2004, paid about 1/2 the price it was new, and have put an additional 220,000kms on it without much effort/repairs.
I could easily drive it for another 2-3 years, and the only reason I'm considering replacing it is that we're thinking about something one size larger.
But, that's not the cheapest way to drive. The cheapest way to drive is to buy the 11 yr old car, drive it for 5 years and lose little or nothing on depreciation. Lots of young people in my neighbourhood buy $2500 cars for university, etc, and drive them for 4-5 years and then sell them for $1500. $1K for five years? Hello, that's CHEAP! Also, they tend to buy Civics/Corollas/Tercels/etc and don't even have to fix them during that time. Those base cars are simple and cost little to drive.
