So here is the deal. A year and a half ago my '99 Subaru Legacy blew a head gasket. $1800 later the car runs, but the valve clearence was done all wrong and the car needs a new engine. I was quoted $2000 to have a used engine installed by Subaru. Thus, I only drive this car a few times per month and have not found anyone who wants to buy it. That being said, in working condition this car is highly sought after by Subaru loyalists so it isn't valueless.

I purchased a new car in January of 2012. An '05 Legacy GT. The car is superb! However, I took a new job in March of 2012 in which I have to drive all over southeastern PA. I am an independent contractor so I pay my own gas, I have no benefits, and no workman's comp. or unemployment should I require it. I consult with schools and families regarding behavioral managment for children with autism. Thus if I get injured I could be without an income, God forbid.

So here is my dilemna. I am averaging 23,000 miles per year on a car that requires premium fuel and my fear is that by the time I pay the car off I will need a new one. Do I continue driving the '05 and not worry about the mileage? After all, it's a Subaru. Or do I put $2000 in the '99 and drive that? I ask because my father recommended that I buy a Hyundai to drive as a "throw away" car and I thought why would I do this when I have a much cheaper option sitting in my driveway.

 

$2000 for a new motor installed? that seems cheap and the way yo go over a newer, more expensive Hyundai.

 

Yes, it is a much cheaper option. I just don't know if it makes more sense to put more money into the car and drive it or to just keep putting miles on my '05. ...it doesn't help that my girlfiend had seizure last month and can't drive for 6 months, adding to the mileage dilemna as I drive her to work some days.

 

If you still really like the '99 (and it sounds like you do), I would probably replace the engine and rack up the miles. There's no additional loss (beyond consumables) in putting lots of miles on a car that's already fully depreciated--as a 15 year old car certainly is.

 

$2k in the broken car to make it work, save the newer car, and which you might get some of back when you sell it seems like the way to go.

 

First, two questions....is the newer "05 paid off, or are you making payments on it? And, knowing that the Subie Turbos, in 05' required premium gas, is there a reason (besides the obvious one....power) why you chose one over the N/A version? (I guess, when you picked out this car, you didn't know that you were going to have to drive so much while commuting on the new job?)

It's not surprising that the '99 went through its head-gasket....that was a chronic problem, from the late 90s to about 2002-2003, with the N/A 2.5s, and resulted in Subaru coming out with a special coolant-additive which extended the factory engine-warranty (not this long, of course). Later versions of that N/A engine, such as your '05, also have had some head-gasket problems, but not nearly at the same rate. (that, of course, could be the reason you chose the turbo version).

As to your current dilemma, though, here's one possible solution: if your girl friend (I hope she recovers from her epilepsy...my prayers are with her) will not be able to drive for a while, rather than dump another two grand into a brand-new engine on a car where something else major could fail at any moment, just donate the old '99 to a charity or an an automotive institute used to train future mechanics/technicians. Doing so will give you a significant tax-deduction on next year's taxes (too late for this year's). Then, if you want to stay with the Subaru brand, either sell your '05 off privately or trade it in on a new Impreza......the lowest-priced one available that will meet your needs. The new Impreza, though with significant road-noise and a not particularly refined CVT that allows some motorboating/bubber-banding, can be expected to have better-than-average reliability and also deliver up to 36 Highway MPG...the best of any AWD car currently sold in the U.S. Its new interior, though still with a couple of cheap-feeling *****, was also significantly upgraded over the pervious-generation. New Imprezas start around 18K, and, if you don't like the CVT, you can, of course get a conventional three-pedal manual. The new 2.0L N/A engine in the Impreza doesn't have a boatload of power, but, in your particular situation, economy seems to be a bigger priority than performance.

 

put $2K into the '99 and and drive the wheels off it.

 

if i may speak to the tax deduction, Mike.

That isnt 100% always the case. If he doesnt have enough deductions to exceed thestandard deduction, the donation will not do anything.

 

Agreed that each case is different. But the IRS tax-code already allows so many deductions (mortgage-interest, state/local taxes, real-estate/property taxes, charities, etc......) that many people are better off itemizing.

 

I have considered donating the car. As an ind. contractor I have quite a few deductions as I am responsible for paying all of the tax on my income myself.

Marshall, I have humored the idea of giving up the '05 for a more efficient Subaru, but I hate to get rid of it as I like it to much. If anything, I would consider getting rid of both cars and buying a new WRX when they come out. However, that doesn't get me past the 93 octane dilemna.

I was perusing yesterday and found that I could get a used engine for $1000 and put it in the '99 myself. However, there is no guarentee that that engine wouldnt have head gasket issues at mile 1 or mile 10,000, leaving me in the same predicament that I am in now. Installing the engine is the easy part, fixing BHGs is beyond my level of skill.

 

Obvious question to me is, whoever you paid $1,800 to fix the car apparently didn't do it right, so why aren't they standing behind their work?

 

i would definitely NOT put more $ into the 99 and HOPE it works out as a RELIABLE commuter car...
and not only that, pay a second insurance payment on that 99 just to save some miles on the 05 and a few bucks in gas every fill up...
premium gas isn't a bank breaker... let's say it's 30 cents more than regular for arguments sake. 20 gallons to fill up your tank would be an extra $6 per tank over regular gas. big woop.
drive the 05 and love it. it's not getting more valuable as it gets older..........

 

How much is the car worth in working condition? I would fix the car and sell it if you could get more than 2k for it.

I would then use the money to pay off your 05 so you could drive the wheels off of that.

 

...but if I still owe money on a car that has been driven into the ground....

Noted.

And the '99 in working cond. is worth over $4k.