K.C.
We got a toddler bed for free, my son is almost 5 and still using it. So they can be used for a while. And I have another son to pass it along to.
That said, it is something you only use for a couple of years, so if money is at all an issue, I'd go straight for the regular bed, although you may need bed rails.
(Yard sale season is now, you might be able to find someone unloading a toddler bed cheap- another option but you would want to get another mattress).