The 40te doesn't have a low speed sensor. Only input, output, and range sensor. The sensor you are referring to is the output sensor. It reads the notches in the parking pawl to give the PCM info to compare to the input sensor, and also give the input for the speedometer.
Possibly there is something accumulated/stuck on the parking pawl that is damaging the sensor. It would suck if the parking pawl has somehow become magnetized.
I don't think this is an extremely common problem. Yes the 40te has other issues... You may want to bypass the cooler in the radiator too, before that fails, and fills your atx with coolant. You will need to get an AUX cooler. You obviously can't just loop the lines. (And expect it to live)
FWIW, I think the neon has a little better track record than the Pinto. It also has a little better technology helping it also. Both cars have gotten an unjust reputation. Mostly due to the media. No one made a huge deal about the Cavaliers being a guaranteed kill when side impacted at less than 25 mph.
Bill
Probably shouldn't listen to anything your penis says, that guy's a dick.
Patience, of course, is a very powerful weapon, but sometimes I start to regret that it is not a firearm.
Too much time spent here is a sign of a bad case of Ownaneonvirus.
2000 Neon MTX swap with '02 R/T PCM
1999 neon coupe 2.4 swap
Now don't get me wrong, The wife and I enjoy the Neon. Alot of my friends have refered to it as the Ford Pinto of the Dodges. (because of the trans. problems). I love my Pintos. I want to love my Neon. But the dang thing keeps burning the tip off the low speed sensor.(front of car, looking to right side of trans.) When I pulled it out to look at it the other day, The end is melted again with clutch materiel on it. OH, I FORGOT, I had to have it towed home. That is why I checked the sensor. NO CODES come up with the key dance. Earler this year I replaced>Solinoid>Both sensors>Filter. I used ATF+4 fluid. It's a 2003. I am planning to replace fluid and filter soon. I got it chained up in the yard cause it ain't going nowhere. I don't want it biting anyone.(humor) I would post a pic but don't know how. I have searched this web site and can't find anything about this tip burning off sensor. So Where do I go from here. I got my list of parts, Going to bank for loan(humor). 
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