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I forgot that some places tax based on engine displacement. I'd be much more inclined to get a Gen II then. You can hypermile it to perform as well as a Gen III, if not better.
Due to diminishing returns, I don't think improving fuel economy 10% (Toyota's goal) every generation is economically prudent, or even possible to maintain in the long run.
I would think the market would flood with Gen II from people trading in for a Gen IV, driving the prices lower. With fuel prices low, that should further reduce the price of used economical vehicles.
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