first time buyer question on GENERATIONS...

A few observations:
If most of your miles are going to be freeway speeds (say, 60 mph and above) the Gen 3 will do significantly better for fuel economy and general engine happiness. You can also confidently use more of a tanks worth of gas in the Gen 3 since the Gen 2's have a bladder in the tank that makes gauge readings less reliable.

If you have to parallel park or do other such tight backing a camera is recommended in these vehicles. The visibility is pretty miserable out the back.

Ethical updates of the nav are expensive. There is a benefit in avoiding the hassle of plugging in and setting up the Garmin but its user interface is nicer than for the factory nav. I'm OK doing without the updates since most areas I drive haven't changed in years

There are some who prefer the Gen 2 cabin layout to that of the Gen 3. You need to at least sit in one of each to gauge the difference.

Welcome aboard!

 

I love the Gen 2's. They're often considered "tougher", they're a little higher off the ground and the interiors aren't quite a spaceship-like as the Gen 3. I'd go out of my way to get a Gen 2 instead of a 3, myself.

The only things that I prefer about the 3 are the electric engine coolant pump and beltless design. The Gen 2 uses a serpentine belt to drive the mechanical engine coolant pump, which can sometimes develop leaks. The Gen 3 has an electrically-driven engine coolant pump that doesn't seem to have leaking issues and has no accessory belt on the engine (one less maintenance item). The Gen 3 does do a bit better in mountainous terrain as well, as it has a larger gasoline engine than the Gen 1 and 2, so it does better once the traction pack reaches minimum charge, which is common on mountain ascents.

I always prefer standalone navigators to built-in navigation systems, myself. They are usually easier to update and often have better interfaces as well.

I agree that the backup camera is very helpful. Rearward visibility out the hatch is not the greatest, and the camera provides excellent visibility over the back bumper, which is especially helpful for parking.

Good luck with your search! I love the Gen 2. I've had it since new and wouldn't trade it for anything.

I've got a "thing" for T100s. If I ever need to replace my '85 Toyota 4wd, the T would definitely be on my list.

 

In the 06 thru 09's the backup cam is standard, on the gen 3's, you have to get one with nav to get the backup cam.

 

I do not know if a back-up cam is standard on Gen2, but most have it and it is very useful.

If you're going used in CA just be aware Toyota CARB warranty rules require the car has been orig purchased and registered in a CARB stare, if you have CARB warranty you get 10-yr 150-k miles from orig purchase on some big hybrid things like battery.

 

The Gen3 was defeatured compared to the Gen2 & my fuel economy isn't significantly higher. Unless you are in an area of new construction roads don't change. I won't buy Toyota's map upgrade and I don't rush to upgrade the Garmin's map. The backup camera is useful.

Since money's tight the Gen2 will probably be the better value.

 

You're likely to get some generational "loyalty" flames burning when you ask which is better.

I think both Generations are/were good machines. With various differences.

"Usually" however, I also think getting as "new" a vehicle as possible when buying used is a good idea. There are some advantages to Gen 3, as already pointed out, No Gas Bladder, no coolant thermos, uses heat reclamation to warm up faster.

Everything, including replacement parts are "newer".

Nothing against Gen 2 Prius, I almost bought one in 2009 when Toyota was making way for the Next Gen Prius.
But in general? If you are buying used on a budget, but can afford newer? Usually I think the newer incarnation is the better choice, especially if neither Generation particularly has a trump card over the other.

Which I do believe is the case here.