Should we finance the car?

cash is best.

I'm afraid your options are limited. You can buy a car for what you have, or you can use that as a down payment and make lower payments on a better car. You can also keep shopping around if you have time and possible get a better car, but a couple grand typically won't get you much in the way of cars.

It sounds to me like you should put your savings as a down payment and get the best price/interest rate you can...and pay as much as you can each month. That way, you get a safe, affordable car and you minimize your payments in the long term.

$2000 won't buy much car, much less a safe one. How about getting a car loan and buy a better car, then plan on paying extra each month to pay it off sooner? You can minimize the amount of time you have the debt.

Safety is of utmost importance when you have a child. You don't need to get stranded because you bought a cheap car. If you can afford payments then get something within your means. Sacrifice is what it's all about when it comes to having children. You won't be sorry for getting something you can count on. Congrats on the little one!