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Sorry, but that's the worst excuse for buying an SUV that I have ever heard. I grew up as one of two kids in a family that had two collies, and we managed to get along just fine with our sedan and even (gasp) went on 10+ hour road trips with it a few times a year. This was even less than ten years ago, after the advent of the Age of the SUV. Sure, it might get a little tight sometimes, but why can't your kids suck it up?
In addition, while your two-row station wagon was great for hauling stuff around, was that really necessary, either? I live in Europe and the only people I know here who absolutely needed to buy station wagons (as opposed to sedans or coupes - I live in a rural area, so almost everyone has a car) use them to tow horses. I find it absolutely appalling for a self-described environmentalist to say that a station wagon was inadequate to haul around two kids and a dog, especially when they're strong enough to tow horses.