What are the chances of landing a Sahara/Rubicon under $600/Month if financed?

Muzzle of Bees

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18,000 trade in would save him $1485 in taxes. I'm missing your point I guess.
If the trade in is paid off and that amount is going to the new vehicle, then that is good.
18,000 trade in would save him $1485 in taxes. I'm missing your point I guess.
He says he owes 18k. That is a critical piece of data. If the vehicle trade in is paid off and that amount is going to the new vehicle, then that is good.
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wvgasguy

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If the trade in is paid off and that amount is going to the new vehicle, then that is good.

He says he owes 18k. That is a critical piece of data. If the vehicle trade in is paid off and that amount is going to the new vehicle, then that is good.
I'm only talking about the taxes not the payment. It doesn't matter if he is paid off or owes $18,000. If they give him $18,000 on trade the taxes are owed only on the difference. Yes, he will still have to finance the $18K but he won't pay taxes on it in most states. Dealers know this and it's a huge advantage for them as they know you have to be able to sell your vehicle to someone for 6 to 8.5% (depending on your tax) to break even. More often than not it's more simple to trade it in.
 

Muzzle of Bees

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I'm only talking about the taxes not the payment. It doesn't matter if he is paid off or owes $18,000. If they give him $18,000 on trade the taxes are owed only on the difference. Yes, he will still have to finance the $18K but he won't pay taxes on it in most states. Dealers know this and it's a huge advantage for them as they know you have to be able to sell your vehicle to someone for 6 to 8.5% (depending on your tax) to break even. More often than not it's more simple to trade it in.
Did you hit your head? You only get tax credit for the money put towards the new vehicle. If you owe 18k on the trade vehicle and get 22k trade, 4k goes towards the new vehicle tax reduction. So now if the vehicle price is 35k and 4k is the only down payment = 31k is taxed. That is just the basic formula with nothing complicated added.
 

wvgasguy

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Did you hit your head? You only get tax credit for the money put towards the new vehicle. If you owe 18k on the trade vehicle and get 22k trade, 4k goes towards the new vehicle tax reduction.
I must have hit my head since you make no sense. You lose me on the "tax credit" and "tax reduction" wording. If you have a vehicle that they give you $18K in trade and trade it on a vehicle that is $22K then you only pay taxes on the $4,000 difference. What you owe on the trade in has no bearing on the taxes you pay. It's not a credit or a reduction it is simply paying taxes on the difference of the new vehicle less the trade in
 

TheBrandon

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I must have hit my head since you make no sense. You lose me on the "tax credit" and "tax reduction" wording. If you have a vehicle that they give you $18K in trade and trade it on a vehicle that is $22K then you only pay taxes on the $4,000 difference. What you owe on the trade in has no bearing on the taxes you pay. It's not a credit or a reduction it is simply paying taxes on the difference of the new vehicle less the trade in
Yup. This is exactly how it works in my state.
 

cmb

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Update: I pretty much paid the difference on the Cherokee and put a $6K down payment on the JL. Got 4% from the dealer. Could've done better with a credit union but I guess I can live with that. I plan on paying it way before the term of the loan or refinance anyway.

Thanks for your input guys!
Just go refinance it before the first payment. That is what I did on my last two purchases. Dealer gave me a better price using their financing so I closed with that and just redid it a couple weeks later.
 

JLCashBurn

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A $600 monthly payment is insane...throw in insurance costs and you have a burden that will last seemingly forever. I always say, if you dont have the cash, dont buy the item...then again 2008 didnt teach anyone a lesson I guess. The only place debt makes sense is a home purchase.

Heres a simple test, imagine you have $40k in your hand..lot of money right? would you be willing to hand it over all at once to buy that Jeep without any regret? Yet people are willing to finance and turn that 40k jeep into a 48k jeep without a 2nd thought.
 

Jondrew

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A $600 monthly payment is insane...throw in insurance costs and you have a burden that will last seemingly forever. I always say, if you dont have the cash, dont buy the item...then again 2008 didnt teach anyone a lesson I guess. The only place debt makes sense is a home purchase.

Heres a simple test, imagine you have $40k in your hand..lot of money right? would you be willing to hand it over all at once to buy that Jeep without any regret? Yet people are willing to finance and turn that 40k jeep into a 48k jeep without a 2nd thought.
I think if you follow your logic to its conclusion we’d all be driving Kias
 

Robertrinaustin

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Did you hit your head? You only get tax credit for the money put towards the new vehicle. If you owe 18k on the trade vehicle and get 22k trade, 4k goes towards the new vehicle tax reduction. So now if the vehicle price is 35k and 4k is the only down payment = 31k is taxed. That is just the basic formula with nothing complicated added.
This isn`t how it works in Texas. You only pay taxes on the difference between the trade in value and the new car cost. It doesn`t matter what you owe or even what you do with the equity (I`ve taken a check for the equity and not even applied all of it to the new car).
 

guarnibl

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A $600 monthly payment is insane...throw in insurance costs and you have a burden that will last seemingly forever. I always say, if you dont have the cash, dont buy the item...then again 2008 didnt teach anyone a lesson I guess. The only place debt makes sense is a home purchase.

Heres a simple test, imagine you have $40k in your hand..lot of money right? would you be willing to hand it over all at once to buy that Jeep without any regret? Yet people are willing to finance and turn that 40k jeep into a 48k jeep without a 2nd thought.
The catch is most people aren't willing to invest that $40k instead to earn a higher rate than the loan. However, for those that are -- or those that can deduct for business use -- it makes sense to turn a $40k jeep into a $48k jeep from time to time. I think very few are in that scenario though, or follow through.

Also, debt doesn't make sense on a home purchase in many scenarios including where the individual won't be able to itemize, but it's just not realistic for most of us to pay cash for a home. Realistically, many Americans use home purchases as savings vehicles that they then cash in on for retirement. It doesn't make it an investment.

$600 payment is not insane if his D:I supports it. It's all relative and Wranglers hold their value pretty well. If you buy it right and put 20% down, you will likely never be under water on the Wrangler -- even at 72 months. I'd also argue that if we hold the deals/person buying constant and just swap Wrangler with Cherokee, and lower the payment $300 -- the Wrangler is the better choice at $600 assuming his D:I supports it. All about the total cost of ownership.

The term 'if you do not have the cash, do not buy the item' does not 'always' apply. It's just not that simple. But I would agree Americans are bad at saving money, and will just buy anything on impulse that someone will approve them for, not thinking of what is coming tomorrow, which I think is the point you were trying to make :) Also, less folks are tapping home equity to buy toys this time around, so I think something was taken away from the crisis.
 
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bumpit

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I got under 600 a month not by much but I got 1.9% from my credit union I was expecting just a bit over 600 but I put a little extra down and didn't roll sales tax into the loan. I told them if Chrysler cap could beat 1.9% I'd consider them but they were honest and said he couldn't get close to that.
 

TheDirtyDangla

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1st: don't use Chrysler Cap. unless they throw you a crazy deal.
2nd: good-very good credit should land you in the low to mid 2% range, which changes your whole dynamic.
3rd: at 2%,(I know, on the low end), $40k will cost you $590 a month for 72 months, putting you right where you want to be.

So, the real question is, how do you get out from under your Cherokee, and get your next JL under $40k? The latter will be easier, you just have to limit the options you add. With $5-8k down, a reasonably equipped Sahara or a lightly equipped Rubi should be well within reach, even including tax. Losing the Cherokee, and that silly interest rate, will be your main obstacle.
Finance manager here, unless Chrysler Capital is running finance specials on Wranglers (maybe 2018 doubtful for 2019) 72 months and up financing approx 95-105% of the vehicle figure 4% as your interest rate with top tier credit. You might be able to find a credit union offering 3.5% by 72 but the days of interest rates in the 2% range are gone for now. Again unless there is finance specials from Chrysler. You wanna be right around 38k by 72 months 42.5k by 84 months which on a Wrangler purchase is fine because these things don't depreciate.

If you aren't planning on off-roading or keeping this for a couple years check out some lease options too. Just realize that putting your money down is gonna disappear so if you wanna only put 4-5k down to cover inequity plus start up fees you may be closer to your $600 payment.
 

cjaama

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Exactly one year ago today the OP ignored the advice of others and went for it.
There's gotta be some kind of setting for message boards where you're required to acknowledge the fact that you're reviving an ancient thread without bothering to read past the first post.
 
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