I bought my S40 used still under warranty after looking at buying a new one. The 6 speed is awesome and a great fuel saver. Power and handling are ample and safety features are unparalelled. Driven right you can have fun and get over 23 MPG. Be warned: spacial reasoning is a must. The trunk is hard to while backing up as are the rounded front corners. Factory premium sound will blow your ears off if you want it to. Nav system is good with steering wheel mounted controls, though this can be distracting at times. I recommend 17" wheels at the minimum to improve grip if you plan on driving aggressively.
Power, handling, 6 speed, built-in nav, sound system
Very little interior storage (glove box, center console), larger rear window