New or Used: Eliminate Debt, Eliminate Subie?

Sajeev Mehta and Steve Lang
by Sajeev Mehta and Steve Lang
new or used eliminate debt eliminate subie

Ryan writes:

Sajeev and Steve,

I find myself perplexed by a vehicular conundrum. A year ago I purchased my first new car, a 2010 Subaru WRX STI SE. It is a great car. Previously I daily drove a 1997 Toyota Land Cruiser. Another great car. I drive about 20,000 miles a year, mostly on the highway.

My wife and I both work. We contribute heavily to our 401K’s and IRA’s. About a month after I purchased the car my wife decided to go back to school, for an MBA. No problem. She now has a year left. For the year we will be setting aside just shy of $1000 per month to pay for her schooling. This leaves us saving very little over the next year. We have emergency funds to last a few months should the need arise. I want to eliminate debt as soon as possible (currently 2 car loans and a mortgage, nothing more).

My inner cheapskate has become uncomfortable with the nearly $1100 a month operating costs of my beloved STI. My inner car guy misses the Land Cruiser terribly. I’m without a truck. Replacing the STI with another 80 series Land Cruiser or Land Rover Discovery I do not save much money because of the fuel costs.

I am contemplating selling the STI, and picking up a truck and a commuter. The commuter would need to be somewhere around $10,000 or less. Cash for one vehicle, maybe a loan for the other. The ideal commuter would be more comfortable than the STI, get around 30 MPG, have four doors and possibly be all wheel drive (for ski trips). Cadillac CTS? Lexus something? Nothing soulless, please. I can turn a wrench and can maintain both vehicles no problem.

What say you? Do I keep the STI and buy a truck when I can? Sell the STI, buy the truck and commuter? If so, what kind do you suggest?

See the attached spreadsheet. ( Ryan’s Car choices)

Steve Answers:

My assumption is that you can cash out the STI. Because if you can’t there is no need to read beyond this sentence.

Well now… you apparently want a Euro car in an American market. Before we cross the bridge of dread known as ’10 year old European car’ I have to ask you three questions (cue Monty Python bridge scene).

  1. Have you ever spent more than five hours performing a major maintenance or repair… and succeeded?
  2. Are you one of those people who enjoys reading up on enthusiast forums at odd hours?
  3. When someone tells you about ‘electrical issues’ with their ride, is your first gut reaction to flee and/or throw up?

If you have the courage to brave a parts network that arguably lead to the fall of the EU, then by all means have at it. Audi sells the A3, A4 and A6. BMW has the 3-Series and 5-Series. Mercedes has… well, let’s not go there.

If saving money and having a fling is your thing, then ask Sajeev. Or get a Lexus IS300 SportCross.

Sajeev Answers:

Don’t ask me about having flings, but I am a damn good tightwad…maybe that’s the problem?

So what does the lady in your life drive? I hope it’s a Panther, as that would make my job much easier. But I still might give the same answer: if it ain’t broke, don’t fix it. Odds are your wife’s ride doesn’t suck down money like the gas/insurance/monthly payment of an STI. Even if it isn’t a “commuter” car.

Definitely sell the STI. You like trucks, so get one. Take it from me, people are actually excited to go for a ride my stupid little 4cyl/5-spd Ford Ranger. I really don’t get it. For some reason being inside a truck with a stick shift is exciting and different to most folk. Which is a sad (but true) statement about our overweight, over-leveraged, conspicuous consumption society. You can both appreciate a cheap little truck’s charm AND enjoy it, considering your love affair with the Land Cruiser. Not to mention you need the money. So be a tightwad like me, at 33MPG highway in my case you won’t regret it. At least not initially.(cough)

You are in Tacoma land, or Ranger land**. Neither are soulless, as my experiences have shown. Drive them both and see if the Taco is worth the price premium…buy it with cash and get one loan payment out of the way. Worry about the wife’s car later, that is a separate problem.

**If you are upside down on your loan for the STI, you might very well be in $8000 Ford Ranger territory.

Need help with a car buying conundrum? Email your particulars to , and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.

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3 of 76 comments
  • Trucky McTruckface Trucky McTruckface on Dec 01, 2011

    I faced a similar dilemma with my Mustang GT. After a job transfer and a cross-country move, I found myself with a smaller paycheck, a higher cost of living, and a dramatically longer commute. I already had a cheap, paid-for commuter, and the Mustang, suddenly didn't make a lot of sense, so I sold it. Saves me about $450 a month in payments and insurance, plus the higher fuel costs whenever I drove it. $1100 a month in operating costs? Holy crap. I know $300-400 of that is probably fuel, but still. Unless you're completely upside down, get rid of it...right now. Don't make another payment. It sounds like you're kinda bored with the car now, anyway. You could finance 100% of a perfectly nice new or used $15-20k car and still come out hundreds of dollars ahead each month (provided its STI that jacked up your insurance rates and not a terrible driving record). Get another 4x4 SUV if that's what will make you happy. Get something decent so that you'll actually want to keep it even after your wife is done with school (if you're an old Land Cruiser guy, I can't recommend the 4th gen 4Runner strongly enough). DO NOT buy a second car. Even with how much you drive, it'll save you maybe a thousand bucks a year in gas. You'll never recoup the purchase price, extra insurance and maintenance costs.

    • Burgersandbeer Burgersandbeer on Dec 01, 2011

      The $1100 a month has to include payment, insurance and fuel. It sounds like the car was bought new, and STIs start with an MSRP of around $34k. I don't know how heavily discounted they are, but my guess is the car cost at least $32k. That puts the monthly well over $500 even on a 5-year loan. Insurance on an STI is pretty much as bad as it gets - only an EVO can give it a run for its money. Lastly, gas mileage is not good. EPA highway is 23mpg, and my understanding is this is not a car that routinely exceeds that rating. Maybe you can squeeze 25mpg out of it if you are really disciplined. Combine these factors with the mileage this guy puts on it and I can easily see $1100 per month. It's a shocking number because Subaru is not a premium brand, but STIs are not cheap to run. Besides, I bet most people only look at the monthly payment when they think of monthly car costs. Anyone still paying off their car would probably be horrified if they added insurance and gas to the monthly cost.

  • Art  Vandelay Art Vandelay on Dec 02, 2011

    If you are a cruiser head at heart then get another one. However if I did 20k a year on the highway and was concerned about maint. costs I'd get a 100 series. Any 80 you get is going to need some attention somewhere (nothing is cheap for them as you probably know) and get you 12mpg on a good day. Go with the handy and enjoy the better brakes, v8, gas mileage, etc on the highway and enjoy your weekends NOT rebuilding the front axle like you know you will be doing soon if you get a 13 year old 80.

  • Kcflyer The solution is harsh punishment, long prison terms, for car thieves. I suggest two weeks for first offense (unless they run from the cops or commit other offenses. Second offense, thirty years hard labor. That should do it.
  • Oberkanone Installing immobilizer is the answer. It's not hard. It's not expensive.
  • MrIcky Out of the possible Jeep recalls to bring up on this site, I'm surprised it's this one and not round 2 of the clutch recall.
  • Dukeisduke I saw a well-preserved Mark VII LSC on the road not too long ago, and I had to do a double-take. They still have a presence. Back when these were new, a cousin of mine owned an LSC with the BMW turbo diesel.
  • Dukeisduke I imagine that stud was added during the design process for something, and someone further along the process forgot to delete it after it became unnecessary.