I love my '02 V70 but I might replace it when it turns 4 years old simply because new cars make me happy. Conventional wisdom says it's cheaper to keep a car until it is worn out. Although, I'm not sure how much cheaper because you may get into some costly repairs and higher maintanance costs as the car ages. However, one area which you will probably save big on as the car ages is insurance.

Maybe now is the time to bargain HARD with those Volvo dealers; see if they will improve their offers. It may be harder to bargain hard when your lease is up and you are facing a deadline.

Reasonable alternatives to a V70 would be the VW Passat and the Subura Legacy. I don't have any personal experience with the Passat but do with the Legacy, it's a nice car for the money but it's not as nice, roomy or comfy as the V70 and it does lack some of the Volvo's safety features. You get what you pay for and you pay for what you get. Good luck.