Lots of people ask me if they should buy new with low interest rates right now. If you have $40k or can handle another $40k debt and prefer no risk, no hassle for a couple of years except oil changes or have a high visibility job, then have at it with the new.
If you want to keep your credit score high, reduce long term obligations for whatever reason and have lower payments then consider used. The interest rate is higher but a $10,000 car will cost you less than a $40k car.
For value, the sweet spot is around 2-4 years old - someone took the hit on the first depreciation (probably around 40% of the value of the vehicle has eroded) but you still have a nice looking, high use value vehicle.
Go older and the value to you of getting to work is higher than any payment you might have on the used car. At 9995 Motors I am hunting now for ten year old low mileage vehicles for ultimate driving value. I call it the magic bean - sometimes you can still find it and it's perfect for getting to work or that new driving son or daughter. I keep the prices below $9995 so you can buy for cash with your tax check or keep the payments around $300 a month and get it paid off in under two years.
You will fix a used car - regular maintenance, things wear out, and there will be things you personnally just want to do - could be a better stereo so you can customize your ride but you will still have saved money.
Vehicles differ as well - in general the fun, cool ones you want probably will need more care than the boring a to b car. Just go in with eyes wide open, be honest with yourself and browse online or on the lot.
Ultimatley, it's fun to plan for your next car - come by and talk to us at 9995 Motors or send us an e-mail at firstname.lastname@example.org and let's discuss what you need and what you want!