I see all the toys that are out on the market today for preschoolers, and many are very expensive. When my girls were little, they had the fancy toys, but their favorite toys were not "toys" to anyone but them. Notice none of these "toys" include a TV and only 1 requires an electronic item (book on tape). Best of all, little to no money is involved.
Padlocks and keys. The keys need to be kept on large key rings to prevent swallowing or chocking. Great as a manipulative.
Empty boxes, paper bags and crayons. Great for the imagination.
old clothing and hats for dress up. Great for the imagination.
wooden blocks. They can be the store ones with ABC's or 2X4 scraps that have been sanded smooth and are larger. If you paint them, make sure you have a lead free or nursery paint. Good for both imagination (building) and as a manipulative.
coffee can with a slit in the lid. It then becomes a "bank" for metal juice can lids. If you want, you can decorate with stickers. Good manipulative.
Flash cards made out of index cards or saved cardboard with shapes, letters, numbers, colors or pictures cut from magazines or photos glued to them with words. If wanted, you can laminate them or cover with clear contact paper.
On a larger scale, you can make placemats the same way. Also, you can cover lined paper mounted to cardboard with letters on it with clear contact paper and then give the child a dry erase marker to trace the letters with.
An old telephone and telephone book.
Books, books and books!!! For car trips, you can read a book onto a cassette tape and ring a bell when it is time to turn the page. Little ones can then read "to themselves" when traveling.
Empty make-up compacts with mirrors inside.
Bowling pins made from 2 liter bottles and a large ball
Sock puppets--be sure not to have items that they can choke on such a loose buttons for eyes....
For more ideas, contact your local Parents As Teachers orginization. PAT is free.