Only thing I disagree with is Mistake #2. When you buy used, you buy the previous owners problems. I prefer to buy new. Otherwise Mistake #1, and Mistake #3 are spot-on.
In 40 years of marriage, we’ve bought three new cars, all the rest were used. We get them with low miles, normally under 20,000. We let somebody else take the 25% hit when they drive it off the lot. We always make sure we have the fully warranty, too. It’s worked well for us.
My last used car was a 2014 Ford Expedition we bought in 2016. I got the last model year that had a V8 engine. Many model years of Expedition experienced no recalls (2010-11 and 2013-17), something which is very unusual. Unfortunately, the Ford 5.4-liter Triton V8 has a habit of spitting spark plugs out.
This is a scenario using round numbers to illustrate my point:
Buy a new $25,000 car with a $10,000 downpayment. Finance $15,000 for four years. That's about $315/mo.
After the four years, your car is paid off and will have maybe 60,000 miles (with normal driving).
NOW, take that same $315/mo you were paying on the car note and now deposit it into a savings account. Don't touch that money for anything else. After four more years, you will have an eight-year old car with roughly 120,000 miles on it.
But you will now have $15,000 saved up for a downpayment on a new car if you need one. Or you can keep your car longer until you have enough saved to buy a new car with cash.
“When you buy used, you buy the previous owners problems”
A two or three year old vehicle, still under warranty but already took the depreciation hit can be a good deal.