Car insurance in Mexico is actually cheap. We payed around $100 for 6 moths. It's more if you have a new car but still way cheaper than US or Canada. You don't need to show insurance at the border, only car registration in your name but if you get stopped by federal police they might ask for it. And don't think there is no money in Mexico. If you drive in Monterrey or DF you will see a lot of nice, expensive cars. You will have the nicest car only in small and remote places.

I've always found the bus system to be fairly reliable and mostly safe.