you can always add something like this to the back seat:
I think in some countries in Europe they required rear shoulder belts in our model year Tercels, so there might actually be mounts in the C-pillars behind the rear seats under the trim. you would have to find shoulder belts from another car that can be adapted, but I think adding simple adjustable ones like that pictured above would be simplest (and cheaper) than buying a newer car.
I like the early Rav4, but my wife wants more room, the visibility out the back of the Matrix sucks, and does not have much storage space in the back. The newest (largest) Rav4 she likes (a stretch version), but it is heaver and does not get as good fuel economy, and it is only introduced a few years ago so they are too new and pricy. Transmission reliably is not as good on the auto trans rav4s as the other Toyota models either. The newer rav4 gets about 24 mpg.
My wife likes the Higlander, it has excellent reliability, but you can not buy them that old, the model was introduced in 2001. So none are really that cheap yet, too new. They are also heavy large vehicles (larger than we need I think, but my wife likes the idea of hauling all that extra vehicle around just in case she wants to haul furniture once a year or so...), and the typical owner only gets about 16 mpg with them.
I recently drove the Suzuki SX4, what a fun and wonderful little AWD car, I love it. I was disappointed to learn that Suzuki had suspended all car sales in the USA two years ago. According to some experts they US sales were sinking because of poor marketing and mismanagement of their US marking plan. Too bad, they are excellent little awd cars, tough and very reliable. though my wife thinks it is too small for her to commute in it, another foot of length in the back for storage space would be nice, but it has reasonable room for storage with the rear seat folded down (but our Tercel4wd actually a lot more room inside).
I actually like the smaller 4wd or awd cars, but my wife seems to think she needs something that can haul a couch around as a daily driver. I can not seem to talk her out of it, so for now we will buy nothing, and she will be driving our AWD mazda mpv min van (even with 300k miles on it), needs a few things, but much less costly than a new Highlander, with about the same fuel economy.