Our VW Fox has served faithfully as the family car for several years, but it's a little on the small side for a growing family and the paint... well, Volkswagen picked a bad formulation for their red paint in 1988 and the result is not pretty. The VW Jetta is larger than the Fox both in legroom as well as trunk space, so we purchased one a while ago and it's been sleeping in the garage until I had time to get to it. Last week, I finally had time.
I've removed most of the front end to expose the now nearly naked gasoline engine. The gas engine will be replaced with a turbodiesel engine from a local junkyard that has been bored out and will be rebuilt with new pistons and bearings, so we will essentially have a new engine ready to go 300,000 miles or more (VWs and diesels both last a very long time -- some VW diesels have passed 500,000 miles without a rebuild). Yes, yes, diesel fuel is currently more expensive than gasoline, but at 45 to 50MPG, it still ends up being cheaper per mile than a 30MPG gasoline car. Plus, you have the option of burning waste vegetable oil in a diesel engine... free fuel!
I'm also going to be replacing all of the wear items. Once the Jetta is done, we will sell the Fox so the Jetta has to be reliable enough to go on interstate trips -- any part that might leave us stranded is going to be replaced now while it's all in pieces anyway. The cost of replacing the engine and various parts will be high up front, but will still be less than new car payments over the long term... and because it is an older car, it will be cheaper to insure and less likely to be stolen. Plus, it's kind of cool to build your own car... kind of the ultimate Lego toy.