[aephi alum]

If your car is in good shape, you may want to think about hanging onto it for a while longer and saving up some $. If it's starting to need major repairs and maintenance, it's time to think about a new car, but a car with 55K miles and no major accidents should be ok. I still drive my '92 Acura at 95K miles... I've been in a few fender benders, but nothing major. I'll keep that puppy as long as it runs.

A credit inquiry does lower your credit score, but I believe it's negligible unless you suddenly get a LOT of inquiries at the same time (indicating that you might be taking out a lot of loans and/or getting a lot of credit cards all at once, and that you might plan on racking up a lot of debt in a short time span). One or two credit inquiries shouldn't have a major impact, especially if you currently have a good rating.

You should do some careful calculations. Often, you'll see a deal of "0% loan or $3000 cash back" or whatever. If you take the cash back, you can still finance the car, but at 5% or 6% or whatever the going rate is. The cash back can go toward your down payment, thus reducing the amount of your loan. So you should crunch the numbers and see which deal is better - 0% loan or cash back.

Be careful with trade-ins. You will probably get less $ than you would selling the car privately, but if you choose to sell the car privately, you have to deal with the hassle of advertising the car, being available for total strangers to take your car on test drives, negotiating the deal, etc.