Lease buyout - Is my thought process wrong?

[BXFXJeep]

The $7,500 is built into that trade in value, it stays with the vehicle in a sense, no one in their right mind would pay out on that $7,500 government money, regardless if you benefitted from it or not.

So the real trade in value of the 4xe is $32k to $35k plus the $7.5K, which is transferred to the new owner.

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[WXman]

I'm betting that when you originally leased your Jeep, the rates were FAR better than now. Leasing now is garbage. I've shopped JLs this summer and Sports are $550/month and up, Rubicon is $650/month and up, and 4xe is all over the place depending on dealership. Compare that to 3 or 4 years ago when you could lease a new JL for $399. It's just terrible now because so many banks got hosed in 2021/2022 when the economy went to hell.

Most people right now are "buying" instead because those payments are equal to lease payments and you have slightly more freedom to do what you want with the vehicle.

It sounds to me like you're very happy with your current Jeep, and at $42k all in it's a great deal and you won't be able to replace it for less money.

 

[JakeM]

If you would have bought it instead of lease, then this would not be a problem for you, but what ever the reason, at the end of the day its your money and your decision

 

[Mguy]

I have a 2022 Rubicon 4XE that has less than a year left on it's lease with a buyout of $42k (Taxes included) at the end of the term. According to KBB my trade in range is $32k to $35k.

Trade in value is dealer wholesale pricing, and KBB, as compared to other sources, generally has prices that favor dealers. Also, you're probably seeing the consumer version of KBB, which is different than their dealer version. The bottom line is that 42K for a known vehicle (including taxes) seems like a good consumer price. It's probably why you can't find something else like it. Also, it seems your buyout price is a benefit from recent Covid inflation.

Very generally speaking, leasing makes sense for buyers who plan on getting new vehicles every 3 or 4 years, and for buyers who don't want, or can't pay, a down payment. You're a favorable outlier.

 

[NWJeepr]

While I do believe a "paid off" vehicle is the best kind of vehicle, putting the cash you'd use to pay it off in a CD instead might be more advantageous depending on what kind of interest rate you're able to get. That's even more true with new vehicles where you can sometimes still get, for example, 1.9% promo financing. Maybe not at Jeep right now, but, other brands.

Otherwise, I can't find anything wrong with wanting to buy out a lease that you know and like when it's within a few thousand dollars of market value. If there are no other enticing options, why not?

 

[Tokenwasp]

Am I wrong to think even though I'd be purchasing this at a loss at the end of my lease term it still makes to do so. There's literally no comparable vehicle I can get into for $42k that isn't used, with less features, and higher miles.

If you can't find a comparable one at a lower price, then you aren't purchasing "at a loss".

The fact that when you pay for it, the trade-in value is less, is true of every vehicle purchase.

 

[dsgrey]

Leasing and then buying, you'll always pay a lot more than just buying from the start but that ship has sailed. The question - can you buy something better for $42k but also without really knowing anything about it's history? Used cars have always been a hit or miss for me, I've had good ones but I've also had bad ones so it's a roll of the dice. If you can't find something better then buy yours for $42k or lease another though you'll be in a similar conundrum when that lease expires too.

 

[Steemax]

I'm betting that when you originally leased your Jeep, the rates were FAR better than now. Leasing now is garbage. I've shopped JLs this summer and Sports are $550/month and up, Rubicon is $650/month and up, and 4xe is all over the place depending on dealership. Compare that to 3 or 4 years ago when you could lease a new JL for $399. It's just terrible now because so many banks got hosed in 2021/2022 when the economy went to hell.

Most people right now are "buying" instead because those payments are equal to lease payments and you have slightly more freedom to do what you want with the vehicle.

It sounds to me like you're very happy with your current Jeep, and at $42k all in it's a great deal and you won't be able to replace it for less money.

That's about right, my payment is $460/mo on this Rubicon lease, I can't imagine what people are paying now and we are happy with it so despite the technical loss on buying it out it's minor If we were to return it and get another lease.

If you would have bought it instead of lease, then this would not be a problem for you, but what ever the reason, at the end of the day its your money and your decision

True, It was my first Wrangler and I was worried I would grow tired of it so I leased it but it's been the opposite especially my son loves it!

Trade in value is dealer wholesale pricing, and KBB, as compared to other sources, generally has prices that favor dealers. Also, you're probably seeing the consumer version of KBB, which is different than their dealer version. The bottom line is that 42K for a known vehicle (including taxes) seems like a good consumer price. It's probably why you can't find something else like it. Also, it seems your buyout price is a benefit from recent Covid inflation.

Very generally speaking, leasing makes sense for buyers who plan on getting new vehicles every 3 or 4 years, and for buyers who don't want, or can't pay, a down payment. You're a favorable outlier.

That's what I'm gathering as well, at $42k I can't imagine finding a comparable vehicle in the consumer market.

 

[Steemax]

Leasing and then buying, you'll always pay a lot more than just buying from the start but that ship has sailed. The question - can you buy something better for $42k but also without really knowing anything about it's history? Used cars have always been a hit or miss for me, I've had good ones but I've also had bad ones so it's a roll of the dice. If you can't find something better then buy yours for $42k or lease another though you'll be in a similar conundrum when that lease expires too.

This is the argument I rarley found made on those FB groups or subreddits when I tried googling this topic. Sure I can turn my vehicle in and not worry about any potential loss due to values tanking but what do I do next? Jump in another lease and make the bank even more money? Pay more for a used vehicle with more miles with an unknown history?

I think i've got enough from everyones response here to make my decision to keep this Rubicon at lease end barring any major catastrophic failure lol.

 

[krayjay]

This is the argument I rarley found made on those FB groups or subreddits when I tried googling this topic. Sure I can turn my vehicle in and not worry about any potential loss due to values tanking but what do I do next? Jump in another lease and make the bank even more money? Pay more for a used vehicle with more miles with an unknown history?

I think i've got enough from everyones response here to make my decision to keep this Rubicon at lease end barring any major catastrophic failure lol.

This is definitely true, i.e. you know the car and its owner. My only point above was that if you end up wanting to get rid of this in the future, you are absorbing the negative equity immediately right now. Just play out this scenario:

In two years, you decide you want something else/newer (for whatever reason). You are already about 10k in the hole on this (it may actually be worse because the used 4xe market will be flooded with people who got leases in the 2021 timeframe who are now turning them in). Then after the first year you owe 34.4k on it after paying interest on the 42k (1927 interest, 7588 in principal). You can't even get 34.4k right now for this and it has depreciated for two more years. Say it's worth 25k. You now still have 10k of negative equity when trying to trade this or sell it. Only way this makes sense is if you keep it until it's paid off. If you can commit to that then I think it's the right call. I know myself and I would not be interested in the same car for 8 years based on past performance so I would opt for something new.

Lot of good points made about lease rates actually, so I would probably buy something new now after turning in the lease since the payments will be so close.

Also, I think there is a 2024 cheat code, which is buying the Willys, which has a ton of new features not previously available and puts it very close to a Rubicon. See .

Full disclosure, I sold my 2021 4xe Rubicon (got a good price and took the cash) and replaced it with a 2024 Willys with the Xtreme Recon package. It was in the low 50s for a new one with the 2024 upgrades plus 35s, lift, 4.56 gears, and rear lockers. Every feature it is missing from a Rubicon 4xe is either not necessary/nice to have or useless to me.

 

[alphawolff]

I have a 2022 Rubicon 4XE that has less than a year left on it's lease with a buyout of $42k (Taxes included) at the end of the term. According to KBB my trade in range is $32k to $35k.

I've searched around for similar threads and the consensus is to let the bank take the hit here and why should you pay $42k for a vehicle worth $10k less.

In my situation this still doesn't make sense to me. Financially for a turn in to make sense I would have to purchase another used vehicle with unknown history. In my zip code I would have to find a vehicle with a max purchase price of $37K plus TTL. In that price range locally I'd have to downgrade from a Rubicon to a Willy's based on what I'm seeing for sale on average.

Reliability wise my 4XE may be more likely to breakdown but since I'm in CA my 4XE has a 10yr 150k mile Hybrid warranty to rely on plus the 5yr 60k mile power-train warranty. So I'm not sure reliability is a point of argument to move to a gas only 2.0T/3.6.

Am I wrong to think even though I'd be purchasing this at a loss at the end of my lease term it still makes to do so. There's literally no comparable vehicle I can get into for $42k that isn't used, with less features, and higher miles.

I would strongly suggest turning the 4XE in at the end of your lease unless you financially cannot do so purely due to reliability concerns and the hit you will take on equity. Just because something is covered under warranty doesn't make it any less annoying having to take it in. I currently have a 4XE that's been waiting on a battery pack for nearly 2 months.

The 2024's are vastly superior than the first gen JLs, and if you have to drop down to a willys in order to afford it I think it's 100% worth it.

 

[Traveller128]

Base Willy’s MSRP now is 58k, you won’t find a Rubicon for under 45k used. And like you said, if you buy a used one, you’re getting unknown history.

There's a nice Sting Gray '23 4xe Rubicon body color hardtop down the street at the Jeep dealer for $45,936 (asking) with only 9500 miles on it. That's not far from new.

 

[sconrad24]

So if you buy it out, you will only experience the loss if for some reason in the next few years you change your mind and want to sell. If you love the 4xe that much and see yourself sticking with it, keep it. I made the opposite call because I could see us potentially needing a different vehicle in a few years.

 

[gonzoflick]

I leased my 2024 JLRUX 4xe for like $75k. Payment is $820/month. I then dumped 20k into modifications. So A) I can't return mine nor would I want to. Hopefully in 28 more months interest rates will be lower and I can buy it out at a decent price

 

[Steemax]

This is definitely true, i.e. you know the car and its owner. My only point above was that if you end up wanting to get rid of this in the future, you are absorbing the negative equity immediately right now. Just play out this scenario:

In two years, you decide you want something else/newer (for whatever reason). You are already about 10k in the hole on this (it may actually be worse because the used 4xe market will be flooded with people who got leases in the 2021 timeframe who are now turning them in). Then after the first year you owe 34.4k on it after paying interest on the 42k (1927 interest, 7588 in principal). You can't even get 34.4k right now for this and it has depreciated for two more years. Say it's worth 25k. You now still have 10k of negative equity when trying to trade this or sell it. Only way this makes sense is if you keep it until it's paid off. If you can commit to that then I think it's the right call. I know myself and I would not be interested in the same car for 8 years based on past performance so I would opt for something new.

Lot of good points made about lease rates actually, so I would probably buy something new now after turning in the lease since the payments will be so close.

Also, I think there is a 2024 cheat code, which is buying the Willys, which has a ton of new features not previously available and puts it very close to a Rubicon. See .

Full disclosure, I sold my 2021 4xe Rubicon (got a good price and took the cash) and replaced it with a 2024 Willys with the Xtreme Recon package. It was in the low 50s for a new one with the 2024 upgrades plus 35s, lift, 4.56 gears, and rear lockers. Every feature it is missing from a Rubicon 4xe is either not necessary/nice to have or useless to me.

That's true, the willy's is not what it used to be. It's practically a Rubicon without a front locker and appearance package. If I could get a 2024 Willy's XR for $50k OTD but I would sort of be going into the same endless loop of payments again i'm trying to avoid at least until my kids are a little older.

I would strongly suggest turning the 4XE in at the end of your lease unless you financially cannot do so purely due to reliability concerns and the hit you will take on equity. Just because something is covered under warranty doesn't make it any less annoying having to take it in. I currently have a 4XE that's been waiting on a battery pack for nearly 2 months.

The 2024's are vastly superior than the first gen JLs, and if you have to drop down to a willys in order to afford it I think it's 100% worth it.

That's true, I suppose it's not as big of an issue for me since it's a weekend vehicle and I don't depend on it for commuting. If it was my commute to work vehicle I would strongly consider turning it in.

There's a nice Sting Gray '23 4xe Rubicon body color hardtop down the street at the Jeep dealer for $45,936 (asking) with only 9500 miles on it. That's not far from new.

Problem is there's another $4708 in taxes for my zip code I would have to pay on top of that so it sort of kills the point of it.

So if you buy it out, you will only experience the loss if for some reason in the next few years you change your mind and want to sell. If you love the 4xe that much and see yourself sticking with it, keep it. I made the opposite call because I could see us potentially needing a different vehicle in a few years.

Curious what you went with in its place?

I leased my 2024 JLRUX 4xe for like $75k. Payment is $820/month. I then dumped 20k into modifications. So A) I can't return mine nor would I want to. Hopefully in 28 more months interest rates will be lower and I can buy it out at a decent price

I've got a decent amount of mods done to mine but nothing close to what you've spent! I just don't look forward to the time I would have to spend undoing everything just to put it all back on the new Jeep lol.

How's your 4xe been holding? Taken it wheeling yet?

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