I need some advice...

[amstel78]

Hello forum!

I have a 2021 JLU on lease. My lease ends this November. The residual is $35k. Given high interest rates and declining used-car values, I'm hesitant to finance or lease a new vehicle, but will probably have to.

These are my options at the moment:

1. Buyout the lease with a loan from my credit union or some other lender. Rates vary anywhere from 5.5% to 9% with tier one credit.
2. Return the JLU and lease another Wrangler with hopes that the Fed reduce the prime rate to something more palatable for consumers within the next 3-4 years.
3. Return the JLU and finance a new Wrangler. Chrysler Cap rates around 8% for tier 1 credit holders.

I have limited liquidity at the moment due to my oldest starting college as well as having to spend $40k to replace the roof on my house, so money is a deciding factor. I love my JLU Willys but always wanted a Rubi. To be honest, my JLU does pretty much everything I need it do both offroad and on road and I would've easily settled for buying it out if interest rates were better. However, I just can't wrap my head around financing a used 3-year-old vehicle for another 4-5 years at current rates.

What would you guys do in my position?

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[BDinTX]

I told my kids I wasn’t paying for their college. The military is a great way to get them out adulting on their own.

If college is important enough they’ll still go and can use their GI bill to pay for it.

When they get out they can use the zero down VA loan to buy a house. That will keep them from living with you after they got a useless degree.

From the money saved I’d turn in the lease and get a new Rubicon.

It’s a win win win.

 

[Heimkehr]

I just can't wrap my head around financing a used 3-year-old vehicle for another 4-5 years at current rates.

What would you guys do in my position?

From one PA James to another:

Purchase a reasonably priced and well maintained used vehicle for cash, and/or with as little financing as possible.

Use the money you're not spending on a high payment to rebuild your liquidity.

With due respect, nowhere is it written that you have to stay in the hole that you've dug for yourself.

 

[amstel78]

I told my kids I wasn’t paying for their college. The military is a great way to get them out adulting on their own.

If college is important enough they’ll still go and can use their GI bill to pay for it.

When they get out they can use the zero down VA loan to buy a house. That will keep them from living with you after they got a useless degree.

From the money saved I’d turn in the lease and get a new Rubicon.

It’s a win win win.

My daughter's in Army ROTC. Guess she wanted to follow in my footsteps, or at least try following in my footsteps. She hasn't committed 100% yet, so that's still up in the air. She wants to do something with medicine or science, and there are a lot of officer MOS' in those fields so time will tell...

 

[amstel78]

From one PA James to another:

Purchase a reasonably priced and well maintained used vehicle for cash, and/or with as little financing as possible.

Use the money you're not spending on a high payment to rebuild your liquidity.

With due respect, nowhere is it written that you have to stay in the hole that you've dug for yourself.

Thanks. Yes, this is another option although my wife isn't thrilled with the idea. She wants whatever I get to be reliable, and not turn into another project car. She's been very patient with me over the years with my W220 S65 AMG build, and before that, a 300TD restore. Anyway, thanks for the feedback.

 

[TheBirdie72]

Lately, with rising prices and interest rates being what they are…
If you aren’t sure if you can afford to be in a high trim wrangler, you probably can’t. ? Don’t overextend yourself financially over a vehicle.

And it’s a real shame, too. Jeep Wranglers are cool, fun vehicles. But they aren’t nearly as affordable as they used to be, and it seems that is exactly how the dealers and manufacturers like it. ?‍

 

[amstel78]

Lately, with rising prices and interest rates being what they are…
If you aren’t sure if you can afford to be in a high trim wrangler, you probably can’t. ? Don’t overextend yourself financially over a vehicle.

And it’s a real shame, too. Jeep Wranglers are cool, fun vehicles. But they aren’t nearly as affordable as they used to be, and it seems that is exactly how the dealers and manufacture like it. ?‍

Totally agree. FWIW, the prices of new Wranglers (while much higher today than they were historically) are still manageable when it comes to my finances. It's the interest rates on loans that I can't abide by. Even the money factor on leases from Chrysler Cap are right at 0.00375 which is ridiculous.

 

[GATORB8]

Just an FYI, I've had a manufacturer (MB) extend my lease a few months to allow for a same brand replacement vehicle to come in. Probably a good chance CCAP would do the same.

If you are going to lease new, definitely look at leasing a 4xe. I know MFs are high now, but I beleive you can still access the $7,500 tax credit by leasing. That stacked with volume discount dealers should still get you in a better payment range.

 

[evo8904]

I told my kids I wasn’t paying for their college. The military is a great way to get them out adulting on their own.

If college is important enough they’ll still go and can use their GI bill to pay for it.

When they get out they can use the zero down VA loan to buy a house. That will keep them from living with you after they got a useless degree.

From the money saved I’d turn in the lease and get a new Rubicon.

It’s a win win win.

Agreed! The military has paid for 6 degrees for me. And now my kids can go to college for free due to my service. I’ve told my kids that I will be picking their degrees because none of my kids are getting worthless liberal arts degrees.

 

[Blacktip]

Your current Jeep does everything you want it to do, and liquidity it tight. It is not the right time to upgrade. Your current Jeep has already depreciated. Best option, imo, is to buy and finance the Jeep you already have. Start building equity, and in few years, when the time is right, upgrade. It is the Jeep you already know... good luck!

 

[NWJeepr]

Try to negotiate the buyout if there's a chance you can afford the payment. I think Jeep and/or the dealer would prefer to have a buyer for that Jeep in a soft market rather than not. I mean truly afford, though. A Jeep isn't worth jeopardizing retirement, your kid's college education, or anything else. Right? Only you know that.

Otherwise if things are tight, why not pay cash for a cheap used car for a while until things improve?

 

[Wbino]

Buy the lease and get a equity loan for the roof.

 

[Heimkehr]

She wants whatever I get to be reliable, and not turn into another project car.

She's been very patient with me over the years with my W220 S65 AMG build, and before that, a 300TD restore.

We've had excellent luck with vehicles sold as Certified Used (specifically, Hondas.) They must meet a higher standard regarding age, mileage limits and overall condition, but usually have better limited warranties included in the sale.

Yes, based on your history of owning and working on fun vehicles, the aforementioned might slot you into something that is much less exciting. That said, as financial recovery and reliability are your stated goals here, there's any number of appropriately-priced vehicles that can get you there.

 

[dsgrey]

Depends on your priorities. I drove cheap vehicles and paid for my kids college so they wouldn't be crushed by debt when they graduated. Then I bought my new Jeep.

Having a lease will always require you to lease or buy a vehicle at the end based on market conditions. Interest rates will most likely still be high. Whether a new Jeep, finance your leased Jeep or buy a used car all depends on your priorities regarding paying for college or what you want.

 

[AcesandEights]

I think I'd look at one of the below invoice dealers. Interest rates on a new vehicle may be lower than financing your "used" buyout.

At 6% below invoice, or whatever you find, you may get a new vehicle purchase price at a point not considerably higher than your buyout, but at a lower interest rate. If you do the math, slightly more purchase price for new, at a lower interest rate, you may save some money by the time it's paid off.

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