25 y/o, currently in a 2024 Subaru Outback Wilderness lease (12k mi/year), sitting at 18,200 miles, 15 months left on it at $625/month but have leased my whole adult life & want to finance & pay towards something to have it paid off, wouldn’t plan on keeping the Outback once lease is up. I make $45-50k a year with no rent or bills currently.
4Runner SR5 Base w/ 4WD is $28k, rolling over $7k negative equity, 741 credit score, they want $2700 down and that would approve me at a 4.9% interest rate, would be in the ballpark of $550-570 a month for 75 months
1 owner, Clean carfax, oil changes on par, had it put on a lift by our shop foreman & everything is clean underneath including frame, Brand new tires & brakes
Asked the salesman who took it in on trade (I work at a subaru dealer) & he said the previous owners were very old (90ish), took meticulous care of it & the only reason he said they’re trading it is because his wife couldnt get up into it anymore
On paper, this deal for a 7 year 70k+ mile car would be asanine im assuming, I wouldn’t ever consider this for another car brand, but the only reason I’m considering it is now because of what the car is & what’s under the hood. Probably only 1 of 4 cars I would ever even consider this deal on.
Is this a smart vehicle purchase for my financial situation?
byu/TheRealCVDY inpersonalfinance
Posted by TheRealCVDY
5 Comments
I don’t think so.
A lot can change in 15 months. That’s too much negative equity to roll into a new vehicle purchase. You’re going be underwater immediately. Additionally, gas prices are rising, the 4Runner guzzles, and will likely be more expensive to insure versus Subaru.
You also don’t have a strong salary, depending on where you live.
I understand the want for a 4Runner(I have one) but you need to wait out a bit. There will be still be opportunities to buy them 12-15 months from now.
Buying a car that is more than half you make with $7k negative equity is insane.
That’s not a car you can afford. Save up and buy something with cash when the lease is up is the good financial descision.
You want to buy an SUV that is 70% of your annual salary? This is why people get into situations they cannot get out of easily later. You *want* this, you don’t *need* it. You *need* transportation, but not this one. You cannot afford it.
You can’t afford either of these cars.
$28k is more than half your annual income…on a used car. Let that sink in.
You should be looking for like a $10k car for the time being. Preferably less. Save up and pay cash for something to get you around. And then save up and move up in car in cash.