financial crunch and new cars

Now that we got our tax documents and everything was laid out in front of me, I calculated yesterday that our net worth had dropped during 2008 by about a third. Even though we have equity in the house and some money in savings/checking accounts, apparently that is mostly canceled by our large amount of student loans. The balance is mostly in relatively risky mutual funds of some sort, which lost more than a third of their value. It doesn't make me feel better that either or both of us may have an employment gap later in the year, that our daycare expenses make up a relatively large fraction of our paychecks, or that we now pay for LP's checkups at full cost (I had forgotten that our insurance only covers well baby care up to the state-mandated one year).
We'll be fine, of course--if we thought we needed that money in the next few years it would have been in a CD or something. However, we are considering doing something I never thought I would do--getting financing to buy a new car. We've decided that we really shouldn't let our lack of money get in the way of safety features such as side airbags and stability control, and with our other requirements such as excellent gas milage and enough space for 2 carseats (which is why our current car will not work for us after ELP comes), we have gotten way out of the price range we originally were hoping for. (It's not even clear to me that we have enough cash for our original price range without changing other plans or dipping our savings below a reasonable buffer value.) We are even considering a brand new car, which is about the same price as some slightly older cars with similar features. We might take a personal loan, but it won't be for the full amount and we may still need bank financing unless we contribute less than our regular amount to retirement this year. That seems drastic considering that, if the market is about to start recovering, we really need to invest as usual (or extra, which is not going to happen; unfortunately we invested extra last year). If the market is not about to recover, I figure everyone else will be in trouble too, so we may as well join 'em.
Ok, seriously, I need to write this proposal . . .