CHALLENGE, how can you know which car, model and year to choose?
OK, we all pick cars based on their past performance, make and model.
But, it's not just a matter of the car and model, but, the year, just like a vintage of wine. As an example, the Honda Accords in the 90s were great until 98-99 and then they went to hell in the early 2000s. Similarly, Subaru Outbacks were great up until 2012 and then started having problems with 2013, 2015 and 2015. SO, HOW CAN YOU BE CERTAIN PURCHASING A NEW CAR THAT YOU'LL HAVE A GREAT EXPERIENCE?
The way cars are made today, there is no way to tell. Most people only have the cars for about three years...
Joe, thanks, you're making a great case for leasing. Is that what you do and recommend?
I leased a car in the late 90's ans never never again. I made payments of $300 a month for 2 years then.. have to return it like a rental! I consider that a big mistake on my part, I went in to it with eyes wide open, read contract, etc. but all that money gone and now no car. I came within 100 miles of having to pay over-mileage at 15¢ a mile, and that may not sound like a lot but adds up in a hurry. I don't like the idea of having to stop and think before going on a road-trip... am I going to put too many miles on my car? Uh uh.
As far as being certain on a 'great experience' no one can. Confident maybe... If My Corolla had an airplane engine drop out of the sky on it today, I would buy a late 2000's -2012 Camry
Unless I was in the car at the time.
David, yes, leasing is expensive, you're renting the car for the first three years and paying down the depreciation. The only benefit to this is, you have a business and can write it off as an expense, you personally know the history of the car and after three years can purchase it at the reduced cost and if you purchased a new car it would have depreciated anyway. So, for some people it works. By the way, on excess mileage, if you purchase the car or sign a new lease at the end of three years or whatever time you sign up for, they'll waive the excess mileage. There's ways around that and you don't have to be concerned about driving. If you intend to turn the car back in, you have to be below the target number of miles. I'm not advocating leasing, it's expensive, but, it is a great way to evaluate whether you want to keep a particular car. Now, in the case of the new Subaru Outbacks, I think maybe leasing would be the way to go. Why?? Well, if you had a problem car and it's under warranty for the first three years anyway, well, just turn it back in, voilla! See, it can work to your advantage. The whole point of bringing this subject up though was to show how difficult it is to ferret out a GOOD CAR! Like I pointed out, in the 90s, you couldn't go wrong with a Honda Accord, people loved and raved about them . Look at the 2008 Accord, the worst car Honda ever did, period. And the 1999 to 2007s were no picnic. Again, it's a sad case of choosing a fine wine, one year is great, the other not so. Who has a crystal ball at home to tell them this stuff?
Mark, I purchase my cars because I happen to know how to work on and fix them, many people do not...
Joe, I purchase my cars and keep them for 15 years, sometimes longer. And, I try to get at least 150,000 miles of service, had one car to 200,000 miles. I don't work on my cars, but, here's my takeaway on all this. Cars cost a lot of money to purchase and acquire with financing although my car's finance rate is less than 2 percent, not bad at all especially for a used car. When you've paid off the car, repairs level out and it only takes less than $2,000 average per year on "actual repairs", I'm not counting maintenance like brakes, tires, oil changes ( all cars need that), so, even if you have to shell out $4,000 for some major repair, its a whole lot less than monthly car payments of $350 to 400 per month for 60 months. If I keep my car payments free for 10 years after it's paid for, I'm saving a lot of money even with any repairs. So, that's my strategy. There are people out there who lease cars and never stop, like renting instead of purchasing a home. All they have are receipts at the end of the day.
There is also a peace of mind in leasing that if anything happens, warranty or not, it's on Ford. (In my case when I did lease) It was just an awful feeling that I had to just return it after my 2-year lease and $300 a month ($7,200) NOT including insurance... and walk home. Granted, they did all maintenance included in the 'deal'. When I bought my Corolla I financed it for 60 months, but when the statements began to come in, and showed $100 to principal and $200 interest I thought to myself -- F- THAT and paid it off in 18 months .
David, wow, when you first started the payments on your Corolla, they applied $200 to interest and $100 to principal? Sounds like you financed this with an institution that still uses the "rule of 78s ". NEXT TIME, finance with a federal credit union, they use "simple interest". Simple interest pays the finance charge as you go, whereas the rule of 78s pays nearly all of the interest up front before the greater portion of principal is paid. Big difference. Federal credit unions are open to the public, if want to know a good one send me a private message.
The rule of 78s is prohibited on loans over 61 months, and most 'consumer friendly ' institutions like federal credit unions don't use this anymore, but, there's lots of financial services that still do and I don't recommend using these. In case you're not aware of the rule of 78s, here's info, https://en.m.wikipedia.org/wiki/Rule_of_78s
More on the 'Rule of 78s ', don't do it. http://www.tiac.net/~mabaker/rule_of_78.html
One more link to rule of 78s, http://www.smarterbucks.com/blog/rule-of-78-loans-why-you-need- to-beware/
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