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It's bullshit. The number of people who actually need an SUV is puny, and limited to those who live in distant locations without paved roads. Anyone else who "needs" an SUV is fooling themselves. More people need trucks, as hauling capacity is often important for work purposes, but it's still a tiny minority of those who actually own them.
Improvement over your Volvo isn't really all that convincing either. 20 city/25 highway is not good fuel economy. My 7 year old car gets better mileage than that. When you're buying new, you could do much, much better.
Let's face it, you don't need the space. You want it. You don't like being crowded when you're in the vehicle. You don't like the road noise that comes in smaller, lighter weight vehicles. The reality is that a family of 4+dog can easily get around in a hatchback. It's crowded, but it works. And how often do you really have more than 5 people in the car. I'd be willing to be it's sufficiently infrequent that your decreased fuel economy is not offset by other parents' saved trips.
It's a free country. You can buy an SUV if you like. But stop justifying it by pretending you need it. You don't. You value your in-car comfort more than you value polar bears. That's the reality, and you just have to face up it.
And you still haven't explained why you bought the highlander over the Ford Escape or Mazda Tribute, which offer car-like fuel economy while still fulfilling your desire for space.