Replace 11mpg 184,000 mile suv with efficient city car?

I'm 18 y/o senior in high school and I drive a 2002 mercedes ML320 v6 awd SUV with 184,000 miles on it I have been driving almost a year. My goal is to convince my dad to sell the SUV and get a smaller car with way better fuel economy. I live in San Fran so am constantly in bad traffic driving up and down enormous hill, tons of stop signs so no matter what I can't get above 12 MPG city. Usually its closer to ten! The best was highway 18 mpg. Rated @ 14/17. I track the fuel use exactly because the gas gauge doesn't work at all. I keep the car full and track the miles driven. Its always in the shop with expensive repairs(mercedes!). I use it to haul my brothers and sisters across the city B/C my parents are divorced. The car is a family car but I wash/wax/vacuum and pay half my insurance and most of the gas, i'm very responsible with the car.In the summer I worked full time and paid All the gas. Dad has an 06 ml350 almost same car also with awd for going to the mountains. I'm stuck paying for tons of gas even though I use the car to haul around my siblings! So why not sell the car for the 2800 dollars its worth to get a 5-6k$ 4 cyl at less then 100k miles. Maybe scion xb, subaru impreza, corolla, honda civic hatch, honda civic hybrid, honda fit… We could be using a third the amount of gas easily and not have to replace the brakes every 20k miles or pay for MBZ parts…
p.s his main reason for keeping the car is that it has no payment and that it is very safe

The thing is you know your car. You might not know the $5-6k car and it might develop problems.

When I was young, I tried doing the math to justify a new Honda versus my gas hog but the math would never work.

You don't say how much you drive either. And all cars get lower than average in rough terrain. So you might only get 17-18 with a smaller car.