I've never seen car loans at rates lower than or even close to inflation, for buyers without excellent credit ratings, and frequently large down payments.
My current car was purchased in October 2010 with less than $5K down on a $40K vehicle with a 5-year 1.9% loan. That's not a "large down payment", since most of it was trade-in. I might have "excellent credit", but I don't really know, as I really only use it for infrequent car and home purchases. I have credit cards, but they all get paid off each month.
For me, the advantage of a new car is the lack of unexpected expenses. I added 4 years to the manufacturer's warranty for $750 (rolled into the $40K), so for 7 years, I have bumper-to-bumper coverage. My dealer gives me essentially free oil changes and tire rotations for life (4 per year limit, which is more than I use), and the other standard maintenance costs aren't unreasonable. I've spent far more money repairing damage caused by a squirrel that shredded the heat guard inside the hood than on maintenance. So, yeah, I have a fairly large payment for 5 years, then 2 years of pretty much nothing where I stuff the car payment into savings, then about 3-5 years of having to pay for some repairs before I buy a new car.
Overall, I think buying a new car every 10 years or so makes better sense than getting a used car every 2-3 years, especially if you want the used car to have the same sort of feature set as the new car. If you are buying beaters, then you'll save a lot of money, but you'll also have a lot more uncertainty about whether your car will start when you want it to.
