I appreciate the responses.
Jivko, I get what you're saying, but you're taking the worst case scenario on the sale/buying of the car. I would never trade in a car to a dealership - they always bend you over on a trade in. I've sold tons of cars privately and dont mind it. We paid $22,500 out the door for the 2011 Sorento (That's LOW for this car - got a stellar deal on it), and now with 38k miles I'm estimating we can get $18,500 for it (based on KBB and other craigslist sales).
The Insight I'm looking at has similar miles (34k) and is priced at $14,500). That's a 2010 model. I'd also buy privately, so skip the $500 dealer fee. So after taxes we'd walk away with a couple thousand dollars and a better MPG car.