Dude, you could rebuild your 1.6 TD every year for what you'd be paying in interest on a new car. If your current car is beyond hope, look for good used, let someone else take that big years 1 through 5 depreciation hit. Every standard production car depreciates, maybe not in year one or two, but eventually.
I had a new '96 4runner, sold it in 04 with 120k on the clock. It was reliable, zero maintenance except a couple sets of tires and oil changes. Worked it all out in the end and it cost us about $.55 per km over its life. Most of that was depreciation. Didnt take into account the time value of money either Sounds bad huh? Its bang on what our local Automobile Association says such a beast will cost. 4runners hold value pretty well around these parts too. FYI, the BCAA does an annual study of car ownership costs, last time I looked they said that a '2004 Cavalier' was about $.43/km for under 10,000km/yr, $.43 +$1000 depreciation for each additional 10,000 km.
My commuter car, '91 TD Jetta cost $4500 3 years back with 250,000 km on it. It now has 400,000 km on it. Minimal maintenance: 1 brake job, struts, timing belt, heater core, lotsa oil changes. Its now ready for a rebuild, but even taking that into account it hasnt cost anything like $.43 /km. Money saved goes into the mortgage.