Another point of view to consider is this. You might take this opportunity to seriously upgrade your choice of auto. Instead of looking for a nearly-new modest vehicle, think about an older high-end car.

Rather than spending $12,000 for a year-old Focus, think about spending $9,000 for a 6 or 8 year old <object of your heart's desire here> and allocate the remaining $3,000 to put it in top-notch condition.

Advantages: You end up with a much nicer, more enjoyable car. The bulk of depreciation is over with, so it retains its value better.

Disadvantages: You don't have the newest technology and ideas, so it isn't as "modern" a car. It's older, has more miles on it, it's going to require more maintenance--be prepared for some pretty scary initial repairs (ball joints, brakes, steering rack, etc.) but once you've dumped that $3,000 into it, you have a good chance of a trouble free car. Remember, it was a higher quality vehicle to begin with.

I generally go way off the deep end with my cars -- I have been known to buy a car for $1500, and put another $6,000 into it (can you say: ShoWagon?) but I end up with exactly the car I want. While I may now have $8,000 invested in that car, I could turn around and sell it any day of the week for at least $3500.

tanstaafl.