If your state exempts older vehicles, I would take them up on that offer!
A really nice older car with 100,000 miles can be had for a song! One or two thousand dollars will buy a comfortable, well maintained, good running, large vehicle that will do everything you need it to do. Of course, you are on the higher-maintenance end of the life cycle, but that is not such a big deal.
Think of it this way, take that $250 ($350? $400?) a month car payment, and think how much routine maintenance you can do with that kind of money. I found a local guy to work on my 15-year-old wagon, and told him that I wanted him to keep it running forever, provided he could do it on a certain budget. Once every couple of months, the car goes in and he does about $400 worth of work. The car is beautiful, runs flawlessly, and never has been a lick of trouble. He even gives me a loaner on the days he has my car! He tells me that I can keep this car forever, if I want to. I just might.
OK, now pull out your car insurance bill. If you have a car payment, your loan holder will require you to have to have a fairly low deductible collision policy. Those are murderously expensive, and don't even cover you against what you really need to be insured against (i.e. large liability losses). In my state (NJ) most new car owners pay more for collision insurance coverage than I pay for my enhanced maintenance package. I don't have to bother with collision, because the book value of my car is so low, that I wouldn't get much for it anyway. I put some money into comprehensive insurance, because if I am in a car accident, I will be more concerned about losing my house than my car!
My biggest problem is the semi-annual emissions inspection. However, the car is well maintained, so I have had no problem so far. My current sticker is good for another 23 months, so I will have my old car for at least that long.
Plus, when you are rolling down the street, what really catches your eye, an immaculate twenty-five-year-old BMW 2001, or a three-year-old Pontiac Grand Prix, that is already beginning to rust?