We currently have two Toyotas (a Camry and Rav4), which we bought new in 2002 and 2007 respectively. They each have about 150K miles (I work from home and my wife doesn't work outside the home, so we don't put a ton of miles on our cars per year).

Both cars still seem to run fine for short trips around town but it's getting to the point that I don't trust either for longer trips out of town (for example, I'm planning to go backpacking in the Sierras this summer and I don't trust either for the long drive back and forth across the Nevada desert).

Given this situation, which of these three options would you choose?

1. Keep one old car and replace the other with a 2-3 year old used car. If we again go with Toyota, this would probably end up being in around the $24-28K range (and most of these seem to be in the ballpark of around 50K miles).

2. Keep one old car and replace the other with a new car. If we again go with Toyota, this would probably end up being in around the $32-36K range.

3. Keep our current cars and rent a car for out of town trips (which would typically be about 15-20 nights per year).

Even if we were to pay cash for a newer car in option 1 or 2, option 3 seems to me to be the most cost effective for at least the reason that the sales tax, fees, and additional insurance costs of a newer car will more than offset the rental costs (the main downsides being the inconvenience of renting every time we go out of town and not being able to enjoy driving a newer car the rest of the time). Agree?

And even though people say new cars are almost always a worse deal than used ones, I have a hard time seeing how, in our situation, option 1 is better than option 2 (as I see it, the roughly $8K difference in up-front cost and marginal cost difference in taxes and insurance is at least worth 50K miles of mostly maintenance free driving, which in our case, would probably take 6-7 years). Am I wrong?