Went shopping yesterday - holy interest rates Batman

[mep4wd]

Long story short my daughter is looking to sell her 2022 Grand Cherokee and pick up a Gladiator as her needs and wants have changed. She’s in the hospitality business (catering and event planning) and is looking at buying a truck or getting a hitch installed and buying an enclosed trailer.

We went shopping and found a 2023 Rubicon (overkill for her) with nearly $10k in discounts and rebates coming in around $55k out the door. After all was said and done the BEST APR we found at our bank and through the finance department was 8.9% equating to a whopping $14k in finance charges over 60 months and a $1200 monthly payment.

She looked the finance manager in the eye and laughed saying no way is she paying $1200 a month and $14k in interest. So, we are now looking at trailers and hitches.

This comes out to 233 per month in interest. Given the fact that there were 10K in discounts the net interest over 60 months would equate to 67 per month.
Lots of reasons for this.
1. Demand for product compared to supply
low supply due to ->electronics shortages->supply chain issues->covid
2. Demand for loan money relative to supply.
3. Other economic distortions.

Looking forward, jeeps will get even more expensive and so will money/interest rates.
Best of luck.

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[Sandevino]

For what it's worth, our 3.6L 8-speed WK2 Grand did a fine job pulling a 2000lb folding trailer across the country. A larger, heavier, enclosed trailer and cargo is probably fine for local stuff but maybe not so good for interstate speeds.

Trailers can be a problem maneuvering around parking lots and gas stations and such. Maybe after you get a hitch just rent a trailer for a day and see if everyone can handle it well before investing in purchasing one.

How about a used cargo van?

She‘s not the typical girl and can back a trailer and put it in the hole on the first shot.

We found a 5x9’ single axle enclosed trailer for a few grand which will fill her requirements.

 

[Sandevino]

This comes out to 233 per month in interest. Given the fact that there were 10K in discounts the net interest over 60 months would equate to 67 per month.
Lots of reasons for this.
1. Demand for product compared to supply
low supply due to ->electronics shortages->supply chain issues->covid
2. Demand for loan money relative to supply.
3. Other economic distortions.

Looking forward, jeeps will get even more expensive and so will money/interest rates.
Best of luck.

The decision to walk out on the deal wasn’t interest alone. When she compared the features the GC was the better vehicle long term.

 

[Main Line Willys]

Another thing to consider is what will the GC be worth in 5 years vs the Gladiator?
Jumping into a Gladiator may be the smart move... Just saying

 

[Sandevino]

Another thing to consider is what will the GC be worth in 5 years vs the Gladiator?
Jumping into a Gladiator may be the smart move... Just saying

That’s true, but in five years she would still be making payments. The GC will be paid off next year.

 

[FloridaMan655321]

I'm about 6 months away from paying my Mojave off, 0% interest. It will be sad paying that last payment....

It will be interesting to see what happens in the future as people will need to eventually replace their vehicles and have to pay almost 10% or more.

 

[ChrisNLA]

Not a bad move to keep the GC. They'll pull plenty weight and perhaps the trailer can stay loaded with items when needed vs feeling obligated to unload a truck between events. I'd have walked, too.

I got about 4.5% interest on my Gladiator with my credit union last August.

 

[bd100]

The GC is a very dense vehicle, weighing almost as much as the JT even though it isn't as long. The shorter wheel base makes for a bit bouncier ride on bumps, but otherwise it's fine.

For both the WK2 GC and the JT I wish they had provided a route through the dashboard to run a trailer brake controller cable. Neither one has a good place for the controller down low.

 

[TheDerb]

I went through NavyFed back in October and got 4.9% for 36 mos

That's an expensive car payment- I have a little RZR that I financed at 4.9% for 36 months, and it was $32k out the door... after financing I'm paying nearly $900/mo. Did you put a bunch down? Or do you have a $1600 car payment?

 

[TheDerb]

Long story short my daughter is looking to sell her 2022 Grand Cherokee and pick up a Gladiator as her needs and wants have changed. She’s in the hospitality business (catering and event planning) and is looking at buying a truck or getting a hitch installed and buying an enclosed trailer.

We went shopping and found a 2023 Rubicon (overkill for her) with nearly $10k in discounts and rebates coming in around $55k out the door. After all was said and done the BEST APR we found at our bank and through the finance department was 8.9% equating to a whopping $14k in finance charges over 60 months and a $1200 monthly payment.

She looked the finance manager in the eye and laughed saying no way is she paying $1200 a month and $14k in interest. So, we are now looking at trailers and hitches.

It's funny, I have a completely different perspective and would have looked at this like the deal of the year for a midsize truck right now, and especially a Rubicon. Here's why:

When I buy a vehicle, I look at the price on the window sticker. I make it my job to get the total cost of payments combined to equal as close as possible to that window sticker price. Dealerships are generally going to make money on you, and I have found that in my experience, if I just keep my focus on making the combined payments as close as possible to that window sticker price, I win. I could punch in any of the cars I buy on a car payment calculator and show less than a 5% interest rate based on monthly payments with the MSRP, which is all I really care about. I've had a lot of new cars- I normally buy a car every 18 months. I rarely see significant discounts with luxury or niche vehicles- especially Jeep Wranglers, which I've had 3 brand new, because the so rarely have any appreciable discounts. Same goes for midsize trucks. Hell, even Mavericks, ( I know they aren't midsized, but they are "affordable") are going at $10k+ MSRP due to dealers knowing they can get it and just adding a dealer charge. Same on Tacomas in a lot of places. So, it's not a common thing right now to walk into a dealership and see a loaded midsize truck being sold at a discount.

Your math to me shows $72k paid for that $65k truck. To me, that isn't a crazy amount paid- if you broke that up into paying MSRP while still only paying that same amount, you are looking at a 4.0% interest rate over that 60 months. So, in my view, I'm getting that truck at a 4% interest rate.

I'm not at all arguing that this isn't a whole lot of money. The Gladiator occupies a funny spot, though- I could be wrong, but I am willing to bet it is the only midsize truck for sale in the USA that is going for under MSRP, and with interest rates what they are, if you look at the amount paid as a whole, the deal she was offered is not that bad in my opinion.

 

[Sandevino]

It's funny, I have a completely different perspective and would have looked at this like the deal of the year for a midsize truck right now, and especially a Rubicon. Here's why:

When I buy a vehicle, I look at the price on the window sticker. I make it my job to get the total cost of payments combined to equal as close as possible to that window sticker price. Dealerships are generally going to make money on you, and I have found that in my experience, if I just keep my focus on making the combined payments as close as possible to that window sticker price, I win. I could punch in any of the cars I buy on a car payment calculator and show less than a 5% interest rate based on monthly payments with the MSRP, which is all I really care about. I've had a lot of new cars- I normally buy a car every 18 months. I rarely see significant discounts with luxury or niche vehicles- especially Jeep Wranglers, which I've had 3 brand new, because the so rarely have any appreciable discounts. Same goes for midsize trucks. Hell, even Mavericks, ( I know they aren't midsized, but they are "affordable") are going at $10k+ MSRP due to dealers knowing they can get it and just adding a dealer charge. Same on Tacomas in a lot of places. So, it's not a common thing right now to walk into a dealership and see a loaded midsize truck being sold at a discount.

Your math to me shows $72k paid for that $65k truck. To me, that isn't a crazy amount paid- if you broke that up into paying MSRP while still only paying that same amount, you are looking at a 4.0% interest rate over that 60 months. So, in my view, I'm getting that truck at a 4% interest rate.

I'm not at all arguing that this isn't a whole lot of money. The Gladiator occupies a funny spot, though- I could be wrong, but I am willing to bet it is the only midsize truck for sale in the USA that is going for under MSRP, and with interest rates what they are, if you look at the amount paid as a whole, the deal she was offered is not that bad in my opinion.

The out the door price with rebates was $51k on a $62k Gladiator which on paper is a good deal.

Paying $65k for a $51k Gladiator is an entirely different issue.

 

[Wheelin98TJ]

It's funny, I have a completely different perspective and would have looked at this like the deal of the year for a midsize truck right now, and especially a Rubicon. Here's why:

When I buy a vehicle, I look at the price on the window sticker. I make it my job to get the total cost of payments combined to equal as close as possible to that window sticker price. Dealerships are generally going to make money on you, and I have found that in my experience, if I just keep my focus on making the combined payments as close as possible to that window sticker price, I win. I could punch in any of the cars I buy on a car payment calculator and show less than a 5% interest rate based on monthly payments with the MSRP, which is all I really care about. I've had a lot of new cars- I normally buy a car every 18 months. I rarely see significant discounts with luxury or niche vehicles- especially Jeep Wranglers, which I've had 3 brand new, because the so rarely have any appreciable discounts. Same goes for midsize trucks. Hell, even Mavericks, ( I know they aren't midsized, but they are "affordable") are going at $10k+ MSRP due to dealers knowing they can get it and just adding a dealer charge. Same on Tacomas in a lot of places. So, it's not a common thing right now to walk into a dealership and see a loaded midsize truck being sold at a discount.

Your math to me shows $72k paid for that $65k truck. To me, that isn't a crazy amount paid- if you broke that up into paying MSRP while still only paying that same amount, you are looking at a 4.0% interest rate over that 60 months. So, in my view, I'm getting that truck at a 4% interest rate.

I'm not at all arguing that this isn't a whole lot of money. The Gladiator occupies a funny spot, though- I could be wrong, but I am willing to bet it is the only midsize truck for sale in the USA that is going for under MSRP, and with interest rates what they are, if you look at the amount paid as a whole, the deal she was offered is not that bad in my opinion.

About 3 years ago, back in the good ol' days, I bought a loaded full size truck for $5k under sticker and with 0% interest.

 

[IdahoRubicon]

Times have sure changed quickly. In mid 2018 I bought a brand new, well equipped, crew cab, gas, 4x4 Ford Super Duty for $39,000
Same truck would cost me almost $60,000 right now.

 

[MRPRmojave]

Wow interest rates are nuts. We were actually looking at a Grand Cherokee for my wife a couple of weeks ago and I could not believe what they pitched as the interest rate....and we have good credit. We ended up two dealerships down the street and walked out with a brand new Audi with a 3.9% . I am somewhat brand loyal but not at 9% interest

 

[Tom C]

Long story short my daughter is looking to sell her 2022 Grand Cherokee and pick up a Gladiator as her needs and wants have changed. She’s in the hospitality business (catering and event planning) and is looking at buying a truck or getting a hitch installed and buying an enclosed trailer.

We went shopping and found a 2023 Rubicon (overkill for her) with nearly $10k in discounts and rebates coming in around $55k out the door. After all was said and done the BEST APR we found at our bank and through the finance department was 8.9% equating to a whopping $14k in finance charges over 60 months and a $1200 monthly payment.

She looked the finance manager in the eye and laughed saying no way is she paying $1200 a month and $14k in interest. So, we are now looking at trailers and hitches.

When I bought my first new Chevy truck back in 1981, my interest rate was 17.9%, so, it could be worse.

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