Q: I want to buy a 1997 Subaru Outback Wagon that appears to have oil/fluid leaks.

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Upon inspection of the vehicle, there is caked-up oil on the sides and bottom of the oil pan. It was moist to the touch but not wet. Also, there is caked-up fluid on the back end of the rear differential. The engine is clean otherwise and sounds good. I have read about the head gasket problems with these models, and want to avoid buying a car that will shortly breakdown. The car is selling for $500. Is it necessary to repair the rear differential gasket or could I possible just keep checking the fluid level? Is the caked up oil on the pan a sign of imminent head gasket failure.

My car has 274000 miles.
My car has an automatic transmission.

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