I don't think it matters much where you live, a three hour drive for a good machine seems common and reasonable to me. Of course I drive over an hour to work each way. When I lived in South Texas we regularly drove 2-4 hours to do stuff, it takes an hour to get to the neighbors house down there. Of course gas was much cheaper in those days. I just factor the travel into the price and communicate with the seller enough to be 95% sure I'm going to buy before I go.
I bought a used Smithy 3-in-1 earlier this year. Like you I debated it for a long time. I wanted a new one, but I always needed the money more for something else and just couldn't afford one. When a really good deal came up on a used AT-300 I bought it. Even though it had originally been owned by a machinist and very lightly used, I found right away the machine will not do very precise work, I doubt that it ever could. I was missing some parts and found that most of the parts from the newer models still fit my 1980's AT-300. They haven't changed much since they first came out.
I've been a woodworking guy for ages and have very slowly added metalworking to my interests. I learned a long time ago with woodworking machines to buy the biggest and best you can afford. That often means used on my budget. I had many multipurpose woodworking tools and always ended up wanting stand alone machines. I had to learn the hard way (I always do) Metalworking tools follow the same rules. On the other hand, one of my first major tool purchases was a Shop Smith back in the early 80's, and while I hated changing setups, I made allot of stuff with that machine. I was in the Navy (Seabees: Construction Electrician), so I needed something that I could break down and move. There were times when I had the whole setup in a closet and worked in the living room of my apartment. (Funny, I still don't understand why my first Wife left me, I'm a real handy guy to have around the house. :nono
The point being, in my experience a multipurpose tool will be a pain, but will work if it's the only thing you can use.
I knew I would likely upgrade later when I purchased the 3-in-one machine, I didn't expect to be looking within a few weeks, and as luck would have it as soon as I bought the 3-in-1 used equipment started popping up everywhere around me. If I had more cash I could have had a full shop. Life is funny sometimes. That's how it goes I guess. I ended up bringing home a 1920 Hendey 14x6 Gear Head Lathe. One and a half Ton of old American iron and a winter restoration project.
) It's way bigger than I need, but the owner was going to scrap the machine if someone didn't take it quick and for $200 it was less than the used Smithy! Not nearly as easy to move I might add. I really hope I won't have to move this beast again in my lifetime.
In the short term do what you gotta to get things done, but in the long run it's cheaper to buy the right tool the first time than to buy it after buying several wrong ones. That's my advise, I just wish I would learn to follow my own advise...