I'd say the sweet spot is about 10 years old / 100k miles. Buy from an individual, drive for another 100k miles, junk when it dies or when some idiot runs into me (the latter situation has resulted in a profit on two occasions, when the idiot's insurance paid out more than I'd paid for the car).
This cycle can be maintained, easily, with $2,000-2,500* cars, if you're willing to put a couple hundred dollars of parts and two or three weekend days a year into upkeep. You have to know enough to do the upkeep, which also translates to knowing enough to tell if a car you're considering has major current problems (and don't buy if the engine has recently been pressure washed).
I don't know whether the 10 year / 100k model would work somewhere that roads have to be salted, but I don't intend to find out for entirely non-car-related reasons. :-)
* Now. When I started driving, this was probably $700-$800 cars, but I'm old.
Holy cow. What 10 year/100k mile car can you buy for $2500? Anyplace I've looked you're looking at cars twice that old/driven for that sort of price.
That is cheap, but I'd be looking at base model kia.
Quick search on kijiji for Edmonton (prices in CDN dollars, cars listed in kilometers vs. miles). So I did a quick search for 2003-2005 (~roughly 10 years old). 100k miles is roughly 160,000km and most of these cars are a bit higher (180-220k) but prices are anywhere from 1500-2500 (that was the range I set to search).
Note you won't see many Toyota/Honda as they hold their value so well on the used car market (as do VW, Subaru from what I've noticed). Most anything else is fair game for rapid depreciation. That might also be the persons problem who is convinced a new car is best. If they are looking at Toyota, it very well might be in his situation.
Ask yourself what reasonable person buys a brand new Toyota, drives it for 10k and sells it the following year at a considerable loss? Where is the incentive here? Why not do a 2 year lease instead? How MANY people do you expect to own vehicles like this? And you want them to have full dealership paperwork of service performed, as if you will punish them with lowball offers if they don't have all this for you? These mythical people do not exist in my eyes. Nobody buys a brand new perfect vehicle and sells it for a 6-8k loss the next year. It's just stupid. You might find 1yr used cars from a rental fleet, or the odd person does exist who makes these stupid moves, but not enough to cover the demand from the used car market, especially the "high demand" honda civic, toyota corolla market.
Low demand - brand new Toyota Corolla. Dealers will give you huge incentives to buy. They were clearing out remaining 2013 models for 5 months on the radio.
High demand - used Toyota Corolla. Especially with complete service history, low mileage and mint condition. Such high demand they can ask damn close to retail price. It's like the apple iPad of used cars, you can crack the box, use it for a few months and still list it at 95% retail and people will scoop it up just to save the tax and convince themselves they don't need the warranty, receipt or packaging.
Anyways used cars can easily be had with 100k miles that are 10 years old for 2500 bucks, I found a bunch with a quick search in Canadian currency which is worth less then USD. Your dollar goes further, surely you can find one in a 2 second search on Craigslist. It just won't be a mint condition Honda Civic or Toyota Corolla. It will probably be a Saturn, Dodge, Kia, Pontiac, maybe a Hyundai, etc.