the 03 is worth more to you than any buyers that want to buy it at a low low price. it's paid for and you have kids. The choice is simple really.

 

if your '03 is well maintained and not nickle-and-diming you, keep it. when you start to get uneasy about repair costs and/or things start breaking is when you want to ditch the old car. you should be good-to-go for a few more years with your mileage.

i had very similar thoughts to you a year ago. i almost sold my '04 and upgraded. in the end i decided to hang on to it for a few more years. it's paid for, costing me nothing but routing servicing, and drives great (plus i know the history).

i'll probably buy an 09/10 6MT sedan sometime in 2011/12, about 1.5 years old is perfect. at that point my car will be 8-9 years old and nearing 100k kms (80k kms now). my mileage is low but the clock is ticking.

that being said, $26.5K is a great deal...

 

You pretty much need to answer this on your own.