The car started overheating around 115,000 miles. At the time, I didn't realize how common this problem was and how easy it was to fix. By not taking care of it right away, the head gasket started leaking. At this point, the car was stolen. The thief did not know how to drive a manual transmission, and ground most of the gears to dust (rebuilt transaxle now installed). He finished blowing the head gasket (now replaced with the multi-layered steel gasket), and also blew out the intake manifold gasket before the car was recovered (122,000 miles).
At 135,000 miles, my timing belt broke while I was on vacation. The manufacturer recommendation is 105,000 miles, most Neon enthusiasts recommend an even shorter time frame. Being an interference engine, damage was done to the entire valvetrain (rebuilt head, timing belt, and water pump installed).
At 150,000 miles, the original struts finally had enough. They were replaced by slightly stiffer struts and springs. Around this time, I replaced the front motor mount (torn) with a stiffer and less expensive Mopar mount. Wheel hop during take-off was virtually eliminated.
At 155,000 miles, the rebuilt valvetrain assembly began failing (just outside of warranty...), two rockers cracked, and eventually caused a rod to start knocking. The engine was replaced, as was the radiator and original clutch).
Other than the occasional blown fuse, and a faulty throttle position sensor, nothing major has failed that could have been prevented by routine maintenance. Despite the money I've put into it so far, I still love to drive it and look forward to improving the performance and handling over the next few years.
When money permits, I plan on buying a second Neon to tear down and rebuild. I've learned so much about auto mechanics and repairs by tinkering and doing things myself (like changing the oil, replacing sensors, troubleshooting wiring problems), that I would not feel uneasy about larger projects like head gaskets, timing belts, exhaust system replacement, etc., when the time comes.
The engine design is actually quite agressive. It has been somewhat detuned to make it marketable as a "family" car. With judicious use of aftermarket parts, even the stock 132 HP SOHC engine can put out over 150 HP with less than $500 invested. The stock 150 HP DOHC can put out nearly 200 HP with the same investment. There are even aftermarket turbo systems that have proven the block capable of handling well over 300 HP, and still get 30 mpg as a daily driver.
The suspension is also much stiffer and responsive than the traditional family car. Quite frankly, I enjoy it.
Interior noise can be a little louder than most cars, especially with the frameless windows. I spend 3 hours per day going back and forth to work and don't mind, as long as the radio is on. I would not take my family on a long (500+ miles) trip due to the limited space, comfort, and noise level (also partly due to the stiffer motor mounts).
The stock stereo system has been rated outstanding by many magazine reviews. I have replaced mine with an aftermarket unit that can play mp3 CD's.
The 1st generation Neon ('95-'99) is an excellent car for just about anyone, as long as you do your homework on it and keep up with the maintenance. It gets great mileage, it handles exceptionally well, it's fun to drive, easy to work on, can look sporty or not-so-sporty, tends to have low insurance rates, and could easily last 200,000+ miles with proper care.