Definitely take a pass and keep looking. My car was totaled in an accident last November (Toyota Camry, 1998).
For the money I got from the insurance company, plus the little I could add on my own, I was really NOT optimistic about my chances of finding anything that great.
Almost bought another Toyota, but it was a year older than mine had been. Seemed to be in really good condition, but was still at the top of my budget (3500) for a 16-year-old car.
A friend talked me out of buying it and said "you REALLY need to at least find something from this century." Seemed like a good point, so I kept looking. Well, my sister did. I *detest* car shopping, but she actually enjoys it, so she scoured Craigslist every day and sent me the "final cut" list.
What I learned is--the good cars ARE out there, for a decent price. But it takes looking. I have friends who got GREAT cars from CarMax, and some that had not such good experience. There's a local place near Alcoa, TN (since I don't know where in TN you are) called Doug Justus motors. I've heard very good things about them as well--I went there but didn't find one for me. I will say that I was impressed with the fact that my sister and I wandered their lot looking at cars and were NOT immediately assaulted by six salespeople out to make a buck. They were content to let us look at our pace and were available to help if needed.
The one I finally bought was off Craigslist, and it was just one of those "deals" that was just a literal answer to prayer. Got a 2004 Chrysler Sebring convertible with less than 75K miles on it, two owners--the second owner had it for most of its life. He was an elderly gentleman who only drove it to the grocery store and such and maintained it very well. He died about four months earlier and had absolutely NO heirs. His apartment manager had been given clearance by the attorney to sell it; since she had nothing invested in it, anything she made was a profit, and *I* got a great deal! I was really looking for another Toyota, or an Acura which I'd also had and LOVED--but I owned a Sebring (though not a convertible) before and had really been pleased with it.
The point is--the good cars are out there. DON'T SETTLE. Take a little extra time and find the "right" car for you.