Should I get a new transmission? Or a new car?

My 2004 Volvo V70 has 147,000 miles on it and the transmission is on its last legs and going to blow out any minute. I could get a new used transmission for around 2 grand in parts and labor, or I could get a new used car—I’m thinking if I did that I’d get a used Honda Fit. My budget for a new used car is around 6–7k.

My concern about getting my transmission replaced is that this car is pretty old and has given me a ton of trouble this year—I had to replace the timing belt, the water pump, etc. I spent around 1400 dollars in repairs this year. I’m worried about pouring money into a dying car that, even with working parts, isn’t worth much more than 2 grand if I ever try to sell it. On the other hand, any used car will have problems, and within my budget I’m not sure what I’m going to get will be much better. And keeping my car means avoiding dealer fees and stuff.

I’m a college student and use my car for groceries/errands, the occasional few hours on the road to my parents house, and to move a few times a year.

So what should I do? New transmission, or new car? Has anyone had this dilemma? What have you done?