So the lease on my 2018 Jeep Grand Cherokee Altitude was coming to an end in a few weeks so I went to the dealership with the intention of either buying it out or putting the equity from this crazy market towards an L since we just had a child and could use the room in the future.
The buyout was $22,000 (one payment left rolled in) which came out to $24k with taxes and fees. They offered 2.49% for 60months at $428/month. I plan on paying $520 to pay it off in 4ish years.
I was told they’d give me $8k equity towards a GC L if I buy or lease it. The L limited trim with a sunroof was around $600 a month 10k miles 36 months, $29k buyout at the end with $5k cash down and $3k back to me. I though this was insane with cash down on a lease so I decided to walk away and buy out my car.
My question is, is this a bad move because I’ll never have that kind of equity again with this crazy market? Did I make the right move? I wanted to keep payments around $500 and it didn’t seem possible with the L without throwing all $8k down which is insane on a lease.
You went into the dealership without a deal worked out and took what they said as being representative of what any of these things should have cost, so you definitely didn’t make the right move.
Next time, work out your plan in detail and be fully informed before you ever consider talking to a dealer.
If you simply bought out your own leased car at the contractual terms, right way to assess it is to compare your cost with comparable vehicles in the market . You might have very well made the right decision . I have a 2018 JGC Limited at 26k miles coming due on November and my buyout is $20,500 + tax. It’s unlikely I will get a better deal than this in November so I will probably buy mine out too.
Maybe but I don’t know about that. The point though (in line with @mllcb42) is that going in to a dealer and asking them 1) how much they want to pay for your car and 2) how much they want you to pay for one of their cars is most surely going to end up with you having a bad time…
The lease buyout price was set in the contract terms, there was no negotiation. And they wouldn’t take a dollar off MSRP on any of the grand Cherokee L’s.
Just because they wouldn’t doesn’t mean they’re representative of the best deal you could get. There’s been mention on here of dealers in the Chicago area doing ~6% off on these, not to mention some of the brokers here offering discounts.
Also, your lease buy out for you is set in stone, but not how much a dealer would buy it out for.
Correct - the lease RV is what you would pay for the buyout.
My lease is currently worth $6K over buyout and coming to an end - I am going to buy it out thru my credit union for 1.9% 36 months with the same monthly.
I figure it will be worth more at the end than going into an expensive lease that this crazy market is bearing…
Have you priced out your car on Carvana or Vroom? The only other scenario I could have seen here was selling it to them directly and then taking the cash and applying towards another purchase. This would have saved you from paying the sales tax. Otherwise sounds like a smart choice.
Yes they quoted me $30k. The dealer explained that I’d have to buy the car then I could sell it to them. The dealer did offer me $8k to put towards a lease or purchase of the grand Cherokee L. Even though it’s “free” money I felt like putting $8k down on a lease was insane and the numbers still weren’t great.
I made the same decision with a 18 JGC Overland a few months ago, although I didn’t involve the dealer (Ls weren’t available yet and probably larger than I’d want). Bought out via a local credit union, sucked it up and paid the taxes.
Equity was too large to pass up a chance of cashing in on, and I’m happy enough to drive the current Jeep for awhile longer. Have been patiently looking for potential alternatives afterwards, since on the flip side I don’t want to go too long out of warranty on a Jeep and prefer not to get into new tire and brake territory either.
The usual advice on here is to separate the equity from your old car from the negotiations for something new. So, get a variety of offers for your old Jeep, not just from a dealer you might want to buy a new truck from. At the same time try to negotiate the best possible price on something new. Once you have the numbers on both sides of that, you can decide how much of the equity you want to put towards something new to possibly lower the payment, but at least you’re controlling the money and doing the math rather than putting it all in the hands of one dealer who wants to make the most for themselves off of both their current car and your car you want to trade in.
You made the right move in not buying the L for MSRP. Since you already bought out your current Jeep you lost some equity there paying the sales tax, but now you can easily sell it to anyone (dealer or car buying service). Get quotes from all the normal car buying sites to compare to the dealers $8k equity and if you really want an L you can for sure get an under MSRP deal from a broker on here.
In the process of buying out my 18 GC High Altitude. There are few to no good deals in this market right now. Have $10k+ equity in the HA, so hoping that things improve in the early parts of next year and will be able to capitalize on some of that equity. Yes, it’s a crap shoot, but don’t things will shift overnight. Watch the market and pounce when ready to get a good deal and get some of that equity out. Certainly think you made the right choice by not taking an MSRP deal.
What is fine is done. No point overthinking what could’ve been cuz we’ll never know.
All we can do is figure out what is the best course of action now,
Have you checked the market value of your car?
How much are you pocketing?
Have you done your research on what is a market rate for a GC L lease in your area (& if you’re willing to travel & ship out of the area)?
With all the above research completed, you can now go shopping for a GC L or anything else, if you really want a new car.
Good luck!!
P.S. - with a scenario you presented, if you had no other choice to buying out or returning the lease then you did a right thing. But if you had a chance to walk away without doing a transaction, then i would have done steps 1 to 4 again.
I just went through this last week. I have a 2018 Sterling w sterling/LUX and tow package on lease that matures in November. I’ve spent the last 90 days looking at dozens of different deals and scenarios and buying out makes the most financial sense by far. Sure at the moment there is a lot of equity but unless you are getting rid of a vehicle and not replacing it then the equity nothing but paper equity on a depreciating asset. The jeep was a great lease at the time and now an awesome buy. (23k residual on a 48k+ MSRP). I checked Vroom, Carmax, shift, Autonation and offers came in from 34,200 - 36,300 (I paid 37k new). In order to replace it with something somewhat similar that equity would be consumed and payments on something new were still effectively higher. Since I have the pano roof, HID’s, 8.4 uConnect and bunch of other features I picked up a 8 year maxcare plan from Zeigler for a great deal. Couldn’t be happier for how it turned out in this climate.
This is definitely a case where my rule of thumb could not have helped you make a quick decision, so we would have to break out the calculator and compute all the variables.
Variables needed.
What was carvana offer for your old jeep
Then subtract that from RV to compute positive equity
Set that number aside
Compute dealer offer WITHOUT muddying up with amount above. Then decide what you want to do. Maybe invest the 8k equity and take the new jeep higher payments as long as rate of return > that payment buy down of monthly.
