I recently saw a post on our forum regarding the choice betwen owning a used Mustang, versus purchasing one through a dealer with a warranty. It's a tricky decision that can be expensive in either case.
A lot depends on how much you drive and how you drive. A lot depends on the individual car, too. I've had 5.0-liter Mustang that pulled 23mpg around town, a 2003 V-6 that barely saw 18mpg on the highway, and my current daily driver is a 5.0-liter that was getting about 18mpg, but the engine was very tired. i expect the new engine to deliver closer to 20-22.
The car payment versus used car debate can only be assessed on a case by case basis. Figure a car payment to be around $500 a month, plus full coverage insurance at about $1500-2000 per year. With a used Mustang, you can get away with the minimum insurance because there is no lien on the vehicle. Estimate $400-700 a year for insurance. The good news is, no car payment. The bad news is that maintenance and replacement parts can cost hundreds of dollars, not to mention you have to add in the labor cost if you're not doing the work yourself. In my experience, i don't think you'll go through $500 a month in expenses, and if you do, it won't be for 36, 48, or 60 months. More like a few months at the most. Buying a used car is always a crap shoot. Also, the few car dealers that i've dealt with have always tried to stick it to me, and i get a sleezy feeling when i step foot into one anymore. Warranties aren't all they're cracked up to be.