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Any smaller Toyota or Honda will give you 35 mpg and even their slighly larger vehicles (Camry / Accord) will get around that if you don't get the V6 model. The limitation will be your $5k mainly. For that price your looking at a late 90s vehicle most likely. Another alternative would be a 2000+ Neon, or a Saturn S series (SC1 / SL1). They seem to be descent cars that hold together and get reasonable mileage.
Ideally, I'd look for a lean burn Honda. That means a Civic HX (manual preferred). That'll easily get you over 40 mpg without even trying. I'd really try to stay above 40 too. You can go with a normal engined vehicle, but its much more work to get the real high numbers with them.
Lets throw some numbers at it for comparison.
25000 miles a year
35 mpg
714 gallons of gas
@ $4 per gallon that is $2857 (over half the price of the vehicle!)
25000 miles a year
40 mpg
625 gallons
@ $4 per gallon that is $2500
-saves you $350 per year over 35 mpg car
25000 miles a year
45 mpg
556 gallons
@ $4 per gallon that is $2222
-saves you $635 per year over 35 mpg car
25000 miles a year
50 mpg
@ $4 per gallon that is $2000
-saves you $850 per year over 35 mpg car
These estimates are incredibly conservative @ $4.00 per gallon. The word is gas will be $5.00 per gallon by next year. At that price these costs grow by 25%.
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