I drive a 15-year-old Volvo wagon I bought used; it has 124K miles on it, so you know where I'm coming from. My thoughts when I read your posting were:
1. Will you pay cash or finance? If you finance, you have to include interest in your calculations. Better to start saving now and buy only when you have saved enough to pay cash.
2. If you cars are really young (you said they are more than three years old, but three years is practically new,) you probably won't need any major repairs for a long time. But if you do anticipate repairs of more than $1500 or so in one year for one car, that goes into the calculation too.
3. You estimate savings of about $1200/year; that's just $100/month. If you finance a new car, your gas savings will only cut your car-related costs by that $100/month, but you will still be out of pocket more than you are now. Granted, you will still have the car when it's paid off, but think of other fun things that $$ could have purchased while you were using it to pay for a car you didn't really need.
Good luck with whatever you decide.