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Discussion Starter · #1 ·
the '06 has gotten a workout...starting to produce weird noises....lots of rattles down the highway....still runs strong at 115K....nothing mechanical...but I'm starting to not trust it as much. considering pulling the plug in the next year or two on another Outback...
best time to buy? xmas? start the new year 15K in debt?
 

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Master debator.
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If you can't write a check for the balance when you trade it in you can't afford it, save up some more. That's the best time to buy a new Subaru.
 

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the '06 has gotten a workout...starting to produce weird noises....lots of rattles down the highway....still runs strong at 115K....nothing mechanical...but I'm starting to not trust it as much. considering pulling the plug in the next year or two on another Outback...
best time to buy? xmas? start the new year 15K in debt?
We put 143,000 miles on our '03 Outback and I loved the size even if it was a dog with the 2.5. I wouldn't get a new one, too friggin big. Even the Foresters are getting too big.
 

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Discussion Starter · #4 ·
If you can't write a check for the balance when you trade it in you can't afford it, save up some more. That's the best time to buy a new Subaru.
with 0.0% financing? we can "afford it" just fine regardless...and choose to make our money work for us in other (better) ways....buying a car is a losing financial proposition for everyone.
 

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Nope. Just pay the car off, don't think you're coming out ahead by using 0% financing. The amount you can "earn" by putting the money elsewhere isn't taking into account the liquidity of your money nor are you assessing risk properly.

Ask yourself this "if I have my car paid for, would I take out a 0% loan on it if I could just to invest the money elsewhere?" I'd hope not!
 

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... don't think you're coming out ahead by using 0% financing.
why not? sounds like a good deal ... unless there are hidden charges or a higher initial cost for this low rate.

The amount you can "earn" by putting the money elsewhere isn't taking into account the liquidity of your money nor are you assessing risk properly.
money is liquid by its inherent definition. and it sounds like he is assessing risk properly.

Ask yourself this "if I have my car paid for, would I take out a 0% loan on it if I could just to invest the money elsewhere?" I'd hope not!
here's a simple lesson in personal finance: borrow at low interest and loan money at a higher interest.

so if he can aquire a loan at 0 percent and invest his own money in the s&p 500 for a return of 9 percent, he will come out well ahead.

this assumes the total cost of the vehicle is the same whether paying cash or receiving the zero percent loan.

and for those that need to help their own credit rating, paying a car loan is an effective way to do it. so, there are additional benefits to taking on debt that you can easily manage.
 

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Discussion Starter · #7 ·
why not? sounds like a good deal ... unless there are hidden charges or a higher initial cost for this low rate.



money is liquid by its inherent definition. and it sounds like he is assessing risk properly.



here's a simple lesson in personal finance: borrow at low interest and loan money at a higher interest.

so if he can aquire a loan at 0 percent and invest his own money in the s&p 500 for a return of 9 percent, he will come out well ahead.

this assumes the total cost of the vehicle is the same whether paying cash or receiving the zero percent loan.

and for those that need to help their own credit rating, paying a car loan is an effective way to do it. so, there are additional benefits to taking on debt that you can easily manage.
bingo! we'll see if its still 0.0% in a year or two.
so...December or is that too close to ski season?
 

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We put 143,000 miles on our '03 Outback and I loved the size even if it was a dog with the 2.5. I wouldn't get a new one, too friggin big. Even the Foresters are getting too big.

Agree.

We looked at the new Outback and Forester models and were not blown away by the quality of the interior materials and overall styling. I'm seeing a lot more Foresters on the road than Outbacks here. I'm guessing that it's mostly because the sticker price is making the Outback out of reach for some.

We ended up with a well-cared for 2008 Outback XT with Navigation. The styling and size are perfect for us. My wife loves her Subie and I got the 2005 Accord handed down to me.
 

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...nor are you assessing risk properly.
That is an issue.

One risk in a 0% loan is that the car will get totaled early (and the insurance payment would not cover the full loan amount). Downside risk exists even with 0%.

Ask yourself this "if I have my car paid for, would I take out a 0% loan on it if I could just to invest the money elsewhere?" I'd hope not!
If someone took out a 0% loan and used it to pay off their X% mortgage (which most people have even those who don't take out loans or hold CC debt), I would hope they would do that. That's a no brainer in my book.
 

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Generally speaking, the best time to buy cars is after Xmas and before the new year. End of the month, end of the quarter, end of the year.
 

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If you can't write a check for the balance when you trade it in you can't afford it, save up some more. That's the best time to buy a new Subaru.
Given this:

... taking into account the liquidity of your money ...
...I don't see why you would suggest destroying the most liquid asset a person has, their cash. If I had, say, $20k in the bank, I would definitely leave it there for a rainy day and take the 0% loan, if I wanted a new subaru.

Draining cash assets to buy a NEW car = loss of liquidity, loss of principal (depreciation as soon as you drive off the lot), and holding the rest of the value in a depreciating asset. That's really a better way to go in your mind than a 0% loan and $$$ in the bank for a rainy day?

Partially, and temporarily, draining cash reserves to buy a USED car, that makes sense to me in the big picture. You can't get 0% on used, they have depreciated more and so will lose value more slowly. But for new, I say for most people 0% is the best option they have even if they have the cash to buy on the spot.
 

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Best time to buy a Subaru? After owing 3 of them (and still driving the last one) I'd say never. They don't last more than ~ 8 years before rusting so badly that they lose structural integrity. My current one had the front control arms rust off, AFTER Subaru performed their "safety" recall. (I'm guess it was for their liability safety, not my personal safety.) After just 80k it has leaking head gaskets, as did both previous Subarus. One of the previous Subi had the center differential fail just after the warranty ran out, necessitating a completely new transmission for a mere $5500. On a 2 year old car. For a manufacturing defect (Subaru missed a snap-ring on the differential, a bearing worked its way out destroying the transmission. Subaru's response was it sucks to be you.)

Buy something else. Subarus are terrible automobiles.
 

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Look into the Subaru VIP program. Available via membership to groups like IMBA.

You must be a member for 6 months, but you get 2% below invoice price with no hassle, anytime during the year.
 

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the '06 has gotten a workout...starting to produce weird noises....lots of rattles down the highway....still runs strong at 115K....nothing mechanical...but I'm starting to not trust it as much. considering pulling the plug in the next year or two on another Outback...
best time to buy? xmas? start the new year 15K in debt?
I'm not sure a 10-year-old car with that many miles is going to net you a $15k difference when the deal is finalized. $20-25k would be more realistic.
 

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Nope. Just pay the car off, don't think you're coming out ahead by using 0% financing. The amount you can "earn" by putting the money elsewhere isn't taking into account the liquidity of your money nor are you assessing risk properly.

Ask yourself this "if I have my car paid for, would I take out a 0% loan on it if I could just to invest the money elsewhere?" I'd hope not!
You evidently flunked your economics class.
 

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Just pay it off why even bother with a loan. Buying a new car that will depreciate 60% in 4 years and then try to make a hundred dollars or less by using a 0% loan?
Especially if you can easily write the check because you have the money? Even worse if you don't have the money you should be looking at a good used instead of new. This sounds like a want and not a need, I'd drive the current one until I could afford to write a check for the balance.
Sounds like the OP thinks it's a good money making scheme however lol
 

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... 4 years and then try to make a hundred dollars or less by using a 0% loan?
I see 1 year CDs at 1.5%.

20k at 1.5% for one year is $300. Sure money, no risk. 5 year are paying a bit north of 2%.

There is no "try" involved in that return. Blue chip stocks that pay a dividend would involve a bit of risk, but not much. Not much try needed for that. Coke gives a yield of about 3% at the moment.

If you want anyone to think you know what you are talking about, you might want to pull numbers from somewhere other than you have been.
 

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Draining cash assets to buy a NEW car = loss of liquidity, loss of principal (depreciation as soon as you drive off the lot), and holding the rest of the value in a depreciating asset. That's really a better way to go in your mind than a 0% loan and $$$ in the bank for a rainy day?
This.

nOOky won't see it until personal experience hits.

My example of a neighbor: Family of four, two full time working adults, two kids in high school. Mom inherited $100K on death of a parent. They decided to pay off the house (essentially used up all of the $). In the next two years, Dad's job vaporized (company closed), the oldest started college, and the other kid got hit with a major medical problem. The lack of a job and the medical issues ate up more than the money left in the bank. Would have been nice for the family to have some of that $100K as a liquid asset (the mortgage bank isn't giving it back).

While the amount of money may be different, if all you have in the bank is $40 or $50K, I don't see how using almost all of it to buy a car (when you could get a zero or near 0% loan) is a viable option. You need money in the bank.

FWIW, I do not ascribe to the hypermiling concepts of personal finance.
 

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My '97 Outback with 245k on it is running strong. No rust, no mechanical issues, no rattles. I did have the head gaskets replaced and the clutch and brakes rebuilt so it has had some maintenance. Prior to that I have had a '91 Loyale wagon that went for 335k before I retired it and an '80 GL wagon that went 255k. I believe that the Outback will easily net me another 100k before I have to retire it. Take care of your Subie and it will run a long time.
 
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