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Hi, I am in the market for a used 2.5L (or more) 4wd wagon. The Legacy Lancaster 6 seem like a good option, as they are well priced and there are a number for sale - around the 1998-2000 - done 100K- 135K kms. I have heard bad things about Legacys - other than having a new cambelt, what are the pitfalls to look out for?

The biggest concern on this model was with headgaskets, overheating etc. We'd be wary of buying one that has had overheating problems in the past too, as when the cylinder heads have been subjected to excessive heat, even after they have been repaired, it's not unknown for further problems to occur later.
The other issue with them is that they are very heavy on fuel consumption, and with the prices of fuel these days, the more fuel-efficient models are far more popular with buyers. This could account for prices being low.