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I got a $1,000 Geo Metro to make a dent in my budget in January. I drove it for 6 months and got great mileage, but the wife didn't want to ride in it with the kids. Just remember the cheap cars with great MPG's might save you a lot of money, but will you be happy driving it? Will your significant other/friends/parents/etc want to ride in it? Are these reasons to not buy a car? Well, its up to you to decide.
I sold the Metro for $1,500 and bought a $6,000 2005 Civic sedan with a 5 spd. I zip around town and get 34 city and 40 hwy. It had 92,000 miles on it and was completely stock. I love it. The wife and kids ride in it every single day and don't complain about it, liked they did with the Metro.
As to your search, get on Craigslist and search cars by owner in your price range. Then, look up the mpg and see if it fits. Bottom line, most cars are going to get better MPG than your truck.
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