2019 JLU Sahara depreciated 42% in 10 months

[Shooting or Jeeping]

In 8 pages it may have been stated, but of note- it all is a shell game when trading in a car. My 2018 JL Sahara was traded in for more than that and it had 32k miles on it. You sometimes find the right or wrong dealer and the right or wrong time. A convertible sells for less in December than it does in May. Used cars tend to trend down in the winter because people have other buying habits. Just the fact of commerce. I wouldn’t necessarily consider this one data point as proof that JLs don’t have good trade in value.

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[KnG818]

Yes, Jeep over priced them, gave too many options to check, and built too many. The JK held it's value really well because there weren't many options. Options lose 80% of their value the day it rolls off the lot. Also, there was pent up demand for a four door. Less people are getting rid of their JKs now.

My '19 $60k Rubi is $39k on trade 9 months later. I leased, but agreed price was $52k. My lease buy out is pretty good actually because of that -- would be about $4-6k depending on dealer if I wanted out, only 9 months into it. Will get only better from here. I almost got rid of my wife's JK 18 months in and I actually would have nearly made money on it. JL is NOT holding value as well.

I called this in early 2018 and it was why I decided to lease. No one believed me, but here we are. As others have suggested, demand is lower for Sahara.

Same here msrp was 60, purchased for 52. Fully loaded.

Was offered 44k trade

What mean options dont hold there value? Of course they do lol. Also makes resale easier

 

[Shooting or Jeeping]

...please entertain me as to why you think putting money down is a bad idea.

Use me for example:
MSRP = 59,800
PAID = 52,300
DOWN = 28,000(Including taxes/fees)
CURRENT BALANCE = 22,400

Why is this bad?

I think the word “bad” needs a definition. If your intent is to have a low payment for your budget- it’s good to put money down. I believe the others that have argued this point are looking at return on investment. If so, putting money down is “bad”.

Reasoning? The rate on that money you are paying needs to be accounted for. The vehicle deprecates regardless of the amount down. So if you can reinvest that down payment and make more than the offsetting interest- you’d be better off holding your cash.

In any case, each person has their own budget and finances. No need to spend someone else’s money. Plenty would argue a 50k jeep is a bad investment regardless. A wise investor would buy a $500 vehicle and move on. Thankfully I am unwise in many areas

 

[KnG818]

I think the word “bad” needs a definition. If your intent is to have a low payment for your budget- it’s good to put money down. I believe the others that have argued this point are looking at return on investment. If so, putting money down is “bad”.

Reasoning? The rate on that money you are paying needs to be accounted for. The vehicle deprecates regardless of the amount down. So if you can reinvest that down payment and make more than the offsetting interest- you’d be better off holding your cash.

In any case, each person has their own budget and finances. No need to spend someone else’s money. Plenty would argue a 50k jeep is a bad investment regardless. A wise investor would buy a $500 vehicle and move on. Thankfully I am unwise in many areas

No $$ down = more interest you will pay in long run.

Sure can also pay off loan sooner to save on interest but that works out to be same as putting money down...just a diff way of playing the numbers game.

Originally someone said(and I quote), "...its IDIOTIC to put money down".

Cant understand why anyone would think putting cash down on any purchase is idiotic? Makes absolutely no sense financially. None. Zero. Zilch.

= higher monthly payment, larger debt amount on your profile, more $$ paid on interest, upside down on a loan, etc.

What's the benefit of no money down = ??

 

[DonBindas]

Thanks for this info. Never thought of it this way. Good points.

I like your mathematical analysis .

Consider going to KBB.com and get a locked-in trade value first and then make sure that the dealer puts ALL your options into their computer to verify it.

 

[KnG818]

I like your mathematical analysis .

Consider going to KBB.com and get a locked-in trade value first and then make sure that the dealer puts ALL your options into their computer to verify it.

Getting an internet trade value is a BAD idea. They will offer you the lowest value. Go in person and negotiate.

Nobody is going to offer you a good $$ amount without first seeing the condition(and vise versa).

They will always offer the lowest value blindly.

 

[guarnibl]

Same here msrp was 60, purchased for 52. Fully loaded.

Was offered 44k trade

What mean options dont hold there value? Of course they do lol. Also makes resale easier

It does make resale easier because they are getting options basically for free. It is not a matter of opinion, this is a fact backed up by data that options lose far more value than the base price. Your trade value would have been nearly the same with an MSRP $10k less.

 

[Renhilio]

I only skimmed the conversation, but didn't see anyone mention the emotional stress aspect of putting little down. In that respect, I would have stressed over a $50k car loan regardless of my financial position. I made a deal with myself long ago for big ticket items. If I can't or won't put 50% down, then I'm not buying. It's sort of a middle ground. Could my money serve me better played differently? probably. But I want to have zero stress over my toys, and this strategy does that for me. I don't notice the payment and could sell throughout the life of the vehicle and come out well ahead.

I always thought I'd be a completely cash guy, but the expense of my toys grew faster than my income! Hahaha.

this is one of the few posts that add value. I second that there is value in managing monthly cash flows rather than trying to earn pennies on rate spread between loan rate and investment return. For me, the peace of mind of not having monstrous $800 monthly car payments offsets the return I’d be getting on my down payment amount. Not to mention, this all assumes an appreciating market. This entire argument vanishes when we have a correction or enter a recession and you bought at a peak.

don’t get me wrong, the whole point of trading on margin is the belief that you can generate a return in excess of your cost of capital. But how many people are willing to put in that level of effort on a balance of $15-$20k? 5% margin is only $1,000 paper gain. For the fictional price of $83/month, I’ll take the peace of mind.

 

[guarnibl]

Getting an internet trade value is a BAD idea. They will offer you the lowest value. Go in person and negotiate.

Nobody is going to offer you a good $$ amount without first seeing the condition(and vise versa).

They will always offer the lowest value blindly.

I have actually gotten some pretty fair trade values sight unseen over the years. It doesn't always happen, but it gives me a ballpark of what a large number of dealers in the area think wholesale value is for the vehicle. I would prefer just to check Manheim, but I don't have access. Either way, this at least gives you some data you can use when you walk in -- as that should always be the next step, as dealers will come UP from there. But having that information first WAS helpful to me in nearly all of my trade situations and it only took 5 minutes (always use a fake phone #).

 

[guarnibl]

No $$ down = more interest you will pay in long run.

Sure can also pay off loan sooner to save on interest but that works out to be same as putting money down...just a diff way of playing the numbers game.

Originally someone said(and I quote), "...its IDIOTIC to put money down".

Cant understand why anyone would think putting cash down on any purchase is idiotic? Makes absolutely no sense financially. None. Zero. Zilch.

= higher monthly payment, larger debt amount on your profile, more $$ paid on interest, upside down on a loan, etc.

What's the benefit of no money down = ??

It isn't idiotic. But it does put you at risk for losing your down payment if you total the car and your insurance doesn't agree with the value. But the same thing could be said by having a shorter loan term and not putting money down.

Overall, I tend to stay away from money down on leases, but for loans I tend to put money down. Not more than 20% usually though.

 

[KnG818]

It isn't idiotic. But it does put you at risk for losing your down payment if you total the car and your insurance doesn't agree with the value. But the same thing could be said by having a shorter loan term and not putting money down.

Overall, I tend to stay away from money down on leases, but for loans I tend to put money down. Not more than 20% usually though.

You lose the down payment on a new vehicle soon as your sign on the dotted line.

I try not to live on hypothetical scenarios that may or may not happen in the future.

 

[guarnibl]

You lose the down payment on a new vehicle soon as your sign on the dotted line.

I try not to live on hypothetical scenarios that may or may not happen in the future.

Actually, I totaled a brand new car once and I got everything I paid back, including my down payment (Geico). But yes cars depreciate

Too much effort spent analyzing these situations my $0.02. Is it the absolute most efficient thing to do with your cash? Maybe -- maybe not. As someone suggested, you aren't even looking at these vehicles anyway if you are doing everything you can in an optimal way from a financial perspective, so it's wasted energy.

 

[Jelllo]

Actually, I totaled a brand new car once and I got everything I paid back, including my down payment (Geico). But yes cars depreciate

Depends on your insurance company. Some offer replacement value, others don't.

 

[DonBindas]

I have actually gotten some pretty fair trade values sight unseen over the years. It doesn't always happen, but it gives me a ballpark of what a large number of dealers in the area think wholesale value is for the vehicle. I would prefer just to check Manheim, but I don't have access. Either way, this at least gives you some data you can use when you walk in -- as that should always be the next step, as dealers will come UP from there. But having that information first WAS helpful to me in nearly all of my trade situations and it only took 5 minutes (always use a fake phone #).

Getting an Internet value is free and it also connects you to other dealers that will compete against each other, rather than against you alone.

If the Internet values were tilted against the retail consumer, then that company doing the Internet valuations would lose its "Brand Attitude" and go out of business.

I personally know a guy who got a $3,000.00 dollar better deal, than the next best offer, on the same vehicle doing that.

As it turned out, a dealer 100 miles away needed one more deal that month to put them over the top and netted them a massive rebate on all the vehicles that they sold that month.

Everyone won!

 

[ThirtyOne]

Actually, I totaled a brand new car once and I got everything I paid back, including my down payment (Geico). But yes cars depreciate

Too much effort spent analyzing these situations my $0.02. Is it the absolute most efficient thing to do with your cash? Maybe -- maybe not. As someone suggested, you aren't even looking at these vehicles anyway if you are doing everything you can in an optimal way from a financial perspective, so it's wasted energy.

Agreed. I drove paid off beaters for 20 years and was happy to do it for my family.

buying a new Wrangler makes no sense financially to start with. But life is short. Sometimes you have to do the thing that makes you happy.

i like to say owning a Wrangler is more like taking a vacation than it is like getting a mortgage. No one assesses a vacation like it is a financial investment.

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