^^ somthing wrong is not limited to youth only, its part of our society in general. In my college days i had the pleasure of using bike, busses for school/college years, later motor bike and car(mostly because I had to drop my sisters when we didnt have a driver or the second car). similar in university years! though always preferred my loved motor bike GTO125 over car well into my first job. Sadly both my corolla 86 and GTO sold after i moved to London. Miss all those days, the independence motor bike beat all other options!
I guess the public transport is much better now compared to our times but still need major improvements, decent and reliable system definitely pull people towards, once the use of car and parking becomes even harder!
on the topic though, i guess the buyer cant just make up his mind. Budget is one thing, rest is your preference, what you want and how certain car suits your needs and choice. My mind works differently, If i was in your situation, I would go for better used car that is more reliable and safe compared to small car with bit newer. As some one has already mentioned if you prefer old sedans from corrolla, civic, or margalla, I dont know exact market now cultus/swift is better car than alto/palto! If you have to go for smaller car, then i guess keep your existing one until you have the budget to buy japanese options. I have driven brand new alto/mehran/ coure - without offence all i can say they are not cars but a huge compromise!