I would go with option one, but I would consider the Hyundai Matrix (diesel microvan) instead. It is spacious, comfortable and fuel efficient (I coud do 12+km/l on bumper to bumper traffic). However, it only comes with manual transmission.

Observe your car first and foremost though. If it gets "sickly" and unstable, it's better to sell it and buy yourselves a brand new one than shoulder the costs of maintaining your old one. Keep an eye on the second heart market as well, you may encounter a gem.