Drover

Seems those problems relate to being an open deck design. The block used for the STi is semi-closed. I'm still not sure what "semi-closed" means, and while I'd prefer "completely closed" I suppose "semi-closed" is still better than "completely open." Also, the STi internals are forged so they can obviously handle more power than the regular EJ25 with standard internal bits.

Drover

And when you say you "had" a rex... what happened that you don't any more?

DanaJ

I'd separate out the down payment part and the financed part. The down payment part is a question of where to hold your money, while the financed part effects your cash flow -- the latter being where most people get in trouble.

Personally, with interest rates of 3-5 percent for new cars, it seems like a bad idea to forego putting $30k in the market or even in savings (US Government I-bonds are paying 4.1% now -- not to mention you have the equity in liquid form rather than in a car which is very illiquid). The difference is not outstanding enough -- if having a completely paid for car is important, then by all means do it! Just don't lease without really understanding the consequences -- unless your car is a tax writeoff you're almost never financially ahead leasing. Typically leasing is a sucker game to get people onto the perpetual car payment plan and get them to buy up from where they otherwise would.

When I first graduated we bought a new car that cost a bit over 1/2 of my yearly gross, financing basically that amount. The payments really hurt for the first two years. One nice thing about loans is that the payments stay constant while your salary (ideally) goes up. This is actually a big deal with 30 year mortgages, but it does have some impact on 5 year car loans as well. Anyway, the idea of financing $25k on a $35k salary doesn't sound good to me. Even more scary are the stories of people wanting/planning to buy the car based on some expected salray once they graduate -- wait until you have some paychecks in hand before signing off on any loans! You don't want to default or have to choose a job solely based on the necessity of car payments.

We're looking at payments that will be about 1/16th our gross pay and we're still worried about what this will do to us. Of course we're doing the 401k, stock purchase, IRAs, 529 plans, mortgage, kids, etc. as well which sucks up a lot of money. Once you get used to no car payments it is quite a shock to sign up for 5 years of fairly large payments.

Based on my experience, my rule of thumb was to have total car present value be equal to or less than 1/2 of my gross salary. By that standard, I could own a new STi if my gross salary was $65k or more (assuming I had no other car). To afford an STi and a new minivan I'd need $130k. An obvious solution is to buy a used car or tone down expectations. This formula also breaks down a bit when you have a lot of investments -- it really ought to be based on net worth instead of salary, but as a rule of thumb it has worked for me.

fasst

DanaJ-Good info, that's excellent stuff---------Fasster

mkim797

I don't know about any of you all, but I think financing a car is probably much smarter than purchasing it cash. 1st of all, a car is probably the worst investment anyone can make at any time (unless, of course, you are sponsered and make money from a car), simply because cars are one of the worst depreciation monsters on the planet. A question: don't you think you should be able to take the cash that you have saved by financing and put it in an investment engine that creates more than a 10% return? If you get an 8% interest rate on your financing and churn out a 10% return on what you WOULD'VE put into a depreciating car, you are losing less money than if you bought the car in cash outright.

essogas

mkim... you are correct about your financing plan but right now there is no investment for me in Ontario, Canada that can offset a 7.5 to 8% financing rate from Subaru. GIC's and bonds pay 3% at best. The marke is way down and way to volatile right now to invest. So I'm considering on buying outright or almost outright and financing as little as possible. I think you should never pay for a car outright if the financing rate is 0%. I paid off my mustang GT in 2.3 years by putting down a small down payment and the rest financed at 0%. The remaining cash I had on hand went to a GIC. The interest I gained on the GIC over 2.7 years eliminated the last 8 months of car payments!

stiger

Check out Royal Precious Metals. If I were a Canadian, I'd dump a bunch of my speculative change here.

MTMS4

I think for a lot of people, their hearts may have ruled their heads and they've just decided to grab a spot on a waiting list....just in case. They know they sure as hell want one, but whether they can really afford it or not, they may be side-stepping the acid question.............at the end of the day, when you receive that fateful call from your friendly local dealer asking you to stump-up the $34-$35k it will probably cost to drive it away (a reasonable guess for MSRP with no extras + local taxes, assuming no dealer gouging), how many people will really be in a position to accept.....and such a scenario is likely to happen for those lucky people in the top 5 of their dealer's waiting list within 4 months from now (if not sooner). It's almost a given that there will be no 0% finance, no attractive lease deals, no fantastic trade-ins......this is the reality of the situation for a new high-demand in-vogue car...........may be different 12 months from now, but not at launch.

jwmcvety

With all this talk about costs and what for some will be a skin of your teeth purchase for a new STI, I figure I'd share some of my own experience. I've only bought one new car in my life. A VW Golf. My intro to Subarus came after moving back to New England and wanting something with awd. For what it's worth I picked up my RS coupe, a 2000, from a repo place. What I paid for the car two years ago is what it's selling for retail right now. One of the benefits of buying it the way I did. No, it wasn't new and I couldn't be 100% sure as to how it had been cared for, but there was no obvious abuse evident and it was still carrying the balance of its bumper to bumper warranty, so I wasn't really all that concerned.

Fast forward two years and now there are WRX's starting to trickle onto the used car market. Many with low miles, still under the bumper to bumper warranty, and the vast majority going for five grand or more under their 2002 msrp. The way I see it, if I were to sell my RS, pay off the remainder of the loan on it, use the cash I have left over to put into a used wrx, I'm sitting pretty. I didn't get the new car smell, or the chance to break it in and there's always the chance that the previous owner beat the crap out of it before it got to me. However, if I'm careful about who I buy it from, check out the car thoroughly, what I have done is let someone else break it in for me, take it back to the dealership to get all the annoying crap like out of alignment wheels, squeaky brakes, glove box latches that don't work, etc, etc... let them take the initial depreciation hit, lowered my anxiety level since my sole new car purchase left me a basket case, searching for the slightest ding or chip everytime it left the garage, and in two years, when STI's are starting to trickle onto the used car market (and they will, don't kid yourself, they all make it there), I'll be in a position to get one, let the original owner absorb the depreciation hit for me, and not be upside down on my trade in.

FWIW, my .02 cents

Drover

Yeah, I hear you on the S4. I used to think to myself the WRX is just a stopover on the way up to an S4. Then I started rallycrossing. I asked myself, "would I ever dream of doing this in an S4?" The obvious answer was no. Make no mistake, the S4 is almost certainly a better car in almost every way, but it just doesn't seem like as much fun as a WRX. The only way I would get an S4 is if I could afford both it and some form of WRX (whether it be a "regular" WRX or STi). Otherwise, even if I could afford an S4 but not an S4 and a WRX, I'd still get a WRX.

Sorry to hear about your job woes. The foundation I worked for went ****-up at the end of December. My wife is sick of her job too, which means we're almost certainly moving soon, which means there's little sense in me getting attached to a new job here. So I'm just kind of sitting in limbo. It's driving me batty...