Winter jacket needed?

I would say yes! Been in Quito for 2 weeks and done day trips to Cotopaxi, Quilotoa etc and it was cold and windy. You could probably compromise on just a warm fleece rather than full on winter jacket but would also recommend scarf, hat, gloves (can buy these very cheap over here) light thermals and rain jacket..... Quito weather can be a bit chilly in the evenings too, but light fleece will be fine!

You will need something for evenings in the highlands, yes. I agree with recommendations for a fleece, and it can rain so waterproof can be a good idea. You don't need to pack for the Arctic, but something reasonably warm. Those ones with the detachable fleeces can be quite good because you can just use the fleece for warmth, or at other times you can use the waterproof outer layer alone to keep you dry and rather cool.

Or buy something in Alpaca at the markets for a cheaper price which will be light and warm.

Big and Bulky you can find for cheap in all sorts of woolen products there. What you want to bring is layers. A good pair of thermals is always handy on cold evenings or even windy days. Very small and lite weight . As above fleece works well as your talking dry season now and you can always throw in a shell, my preferance is gore tex, but even cheap ponchos will work for rain or more warmth. I'd leave any bulky heavy jacket at home as you can get something there if necessary.