You're willing to spend up to 16k on a new car.
You think it would take about 2k to fix up your Aztek? Let's say it actually takes 3k. Hell, 6k. If you don't drive like an asshole, that should be enough to make it last a long time.
You're getting around 23mpg combined, and you drive 37 miles a day? Let's say gas hits $4 a gallon again. You're spending $6.43 in gas a day. You upgrade to a car that gets 33mpg combined. Now you're spending $3.57 in gas a day. That's a difference of $2.86 a day. That's a savings of $1,044 a year.
You'd have to drive your newly rebuilt Aztek for a decade to make up the fuel difference. Toss in the opportunity cost of ten grand over ten years, and this really isn't about saving money. You want economy advice? Okay- don't buy a new car right now, or probably any time soon.
If you just want a nicer car, it's your money- just make sure it's really you and not the Joneses making the decision. And at least stretch for the Fit or something that's really worth such a big investment. Don't buy a inferior, less economical, less reliable car for a few k less and tell yourself you saved money. Get the top of the line and never look back.
And DEFINITELY don't buy a used car with no warranty. The transmission could blow while you're driving it off the lot. If you're going to risk a dead car, don't risk having to make payments on it as well. (Edit: I'm talking about a recent, still expensive car. Sidegrading to a more economical shitbox which you then fix up can be a great option.)
I get this advice, I really do. I'm a math guy all the way. In the real world it just doesn't work that way though. The difference in yearly repair costs will be significant for the next five years. My Aztek is at 180k. One wheel bearing has gone, it is due for a timing belt. The tranny is rough and I knew what the next two years will be like. With a much newer car those long term fixes are pushed back quite a bit. Even if one or two of them happen it is still far cheaper to run on a day by day basis.
You are getting me to move away from thinking about a hybrid though. They have the cost of a battery at 100k. That isn't small.
