Car audio sounds terrible. What should I upgrade first?

Yasamf

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I have a basic aftermarket (Kenwood KDC-205 CD) Receiver. used to go for $85.00 a few years ago...

And my car speakers are (VR3, 3 way speakers) that I bought at walmart that go for $20.00 each.

and as you can guess, my car audio sucks. The volume gets loud but the quality drops like crazy, then the volume on certain instruments wave in and out so I have to turn it down constantly.

I have around $600 and I can't buy anything nice, but I don't really know where to start. New stereo? New speakers? Price to spend on both?
 
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