Can we talk financing now

[Dietruck]

But at the end of the day you own nothing no equity " QUOTE]

This not a true statement, you stil have equity. If you value of the car it worth more than the residual price. The leasee gets the benefit. It is the same as trading a car without fully paying off the loan. Any thing you get above the loan buyout ( or residual price) is equity.

That said it is a little harder to get the equity out. Private sale is even still an option. Just abit more paperwork.

Not trying to talk poeple into leases but you still can have equity at the end.

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[Dietruck]

How leasing works with Jeep dealerships is there are three leasing companies that we can use. Chrysler Capitol, US Bank, and Ally. Right now the main lease bank is most likely going to be Chrysler Capitol, because they have crazy high residuals. Leases are based off 3 factors: term, residual, and money factor.

Terms are 24, 36, 39, and 48 months. Your term depends on if going a longer term lowers payments, or if your vehicle you are purchasing has a "sweet spot." JL Wranglers have a great 39 month lease and a good 48 month lease.

• Next factor is residual, which is based on the value the bank thinks the vehicle will be worth at the end of the term. Now I don't have the Chrysler Capitol rate sheets yet, but I assume at least above .70. Sports having your highest residual, Overland 2nd highest, and Rubicon the lowest. (I heard rumors of .80 which is crazy.) Take your MSRP (residuals aren't based on discounted prices or rebates) multiply by your residual and you get your residual value. Your residual value is the buyout price at the end of the lease, and that value stays the same from the beginning. Higher residual, better resale value, better payment. Lower residual, standard resale, worse payment, less you owe at the end of the lease. How do these cars have $200 leases you may ask? Well that is our final factor...
• Money Factor, which is really a fancy term for interest rate. Just take your money factor .00175 for example. Multiply by 2400 and you get your interest rate 4.2%. Money factor is based on vehicle and credit. To make things simple, like JL Wranglers, Gladiators are not going to have an incentive based rate. So expect around that example I gave earlier.

The reason why I am choosing to lease, and why I recommend them is basically a lower start cost of ownership. GAP protection is included in a lease. You also get a very low monthly payment compared to a purchase payment. Potentially up to $300-$400 in savings per month. The things to watch out for is your driving miles 10k, 12k, or 15k and making sure you don't have any major damage on the vehicle in case you turn it in. (Chrysler is pretty accepting when it comes to damage repair, anything smaller than a softball is ignored.) Even if you are going to mileage out your lease, you can still get a great starting lease payment then buyout your lease at the end with no penalty from the bank. You can also sell and trade your lease if you want to make some money, if your in a good equity position.

Couple protips:

Don't try to roll negative equity in a lease, your negative will not go into the residual. It is one of the quickest ways to pay off negative equity if you can make the payments. Same thing with aftermarket parts it doesn't go into the residual, so you end up getting a much higher payment for something like a lifted Jeep from a dealership.

Always get a pre term inspection scheduled by Chrysler at your house or work. For some reason the reps will tell you that you don't need it, just take it to a dealership. You can get blindsided by the cost a of small repair that you could of taken care of for half the price Chrysler Capitol charges.

Sorry about the blog post, talking about leasing makes me a little long winded.

Thanks for post. It helps knowing some ballpark numbers from the JL's. That is the insight I have been looking for.

 

[furrymurray]

Thank you very much for that information. @Moonridge

 

[billyjk7]

If the dealership will match your local/best outside financing, offer to let them have it for 1-2% off of your price........they get a kickback for selling loans to the bank!

 

[Daddiator]

The official Jeep website only shows 24/36/48/60 month financing terms at Chrysler’s rate of 4.46%. My credit is good, according to all my credit cards’ free monitoring service I’m hovering right in the 750ish range. How accurate are those terms and rates that Jeep is showing in my build summary? I don’t think I’d want to make payments any longer than 5 years on a vehicle, but you say that 72+ month plans are becoming common.

 

[Pogoda]

True, true. Check your local credit union, become a member if necessary as they usually have the most competitive rates.

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