Are you sure the best decision financially is to drive the current car into the ground? We don't have enough context toy make an informed decision. But saving 1000+ a year in gas (that continues to go up) to have a brand new, relatively maintenance free car for the next several years isn't necessarily a horrible decision
It is incredibly difficult to beat the "drive it in to the ground" strategy on a strict fiscal basis alone. Even a $22k car will come with a ~$400/month car payment. That's $4,800/year in car repairs; which is a lot of repairs. That's almost 1370 gallons of gas (at around ~$3.50/gallon). You can drive 34,250 miles on that amount of gas if your current car averages around 25 MPG (not hard if you already own a compact car). It really only starts making sense when the older car requires so many repairs that it becomes unreliable. At that point, it starts making you late to work, or causes inconveniences that are untenable.
There are lots of reasons to buy a new car. I drive a new car every three years, so I lease. Fiscally, the decision to drive a new car every three years is about the worst decision you can make. I make that decision in the light of day though. I'm able to afford it, and we still maintain a household savings rate of 30%. Yes, I could increase that savings percentage even more by paying cash for a car and driving it in to the ground, but I choose not to. I choose the luxury of a new car in spite of its fiscal downsides.
