MY FRIEND has a 2002 automatic Corolla. Whenever he stops at the lights, he puts the car into neutral and then re-engages drive when the lights change. Could this cause damage/excess wear to the gearbox?
NO IT won't cause wear on the gearbox, but it's not a good idea on safety grounds. He's got no chance of getting out of the way should something happen that puts him in danger while he's sitting there in neutral. It's much better to be in drive with an escape plan just in case.
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