I have $16,000 and I have to decide wether to buy a new car or to put that money into my current car. a 2000 mercury sable wagon. WHat do you guys think?

Welcome to AF!
What condition is the Sable in? If it's in fairly decent shape, I'd continue to keep up the maintenance and fix what breaks on it until it becomes economically unfeasible to continue doing so. I was always taught that it's generally cheaper to fix and older car than to make monthly payments on a new one.
Here is a link to the Car Talk guys, they have a weekly radio show and a weekly column in many papers across the country. Scroll down to the second comment by Ray:http://www.cartalk.com/content/columns/Archive/2004/November/09.html

thanks for the info! I have a follow up, Do you guys think $8,000 for a used german car is worth it?

German cars can be finicky beasts, especially in the < $10,000 range.