Baby on the way. Should we upgrade our car?

My spouse and I just bought a house and are expecting our first child next summer. We currently have a 2011 Subaru Legacy that gets us from A to B, but we are considering upgrading. We are thinking we may need something bigger/safer that can better fit a carseat and stroller (in addition to our small dog). We would also like something with an in-car navigation system, as our current setup requires us to take our eyes off the road.

Would this be worthwhile purchase given the current car market? Should we wait out the market for a bit? Should we stick with our Subaru and instead contribute more to retirement?