Grand Cherokee Quote, feedback appreciated

Ask the Hackrs
1

Hi!

Would really appreciate feedback on 1st round of negotiations. I have a 2009 Honda CR-V to trade in, it is in rough condition, I was surprised at the trade-in value. Below is email from dealer.

Year, Make, Model, and Trim: [2017 Jeep Grand Cherokee Limited 3.6L V6 4x4 with leather, heated seats & steering wheel, Navigation Connect 5.0, 8.4" screen]

MSRP: [$43,975]
Selling Price: [$39,249]
Rebates: [none]
Trade-in: [$8,000]

Months: [36]
Annual Mileage: [12,000]

MF: [0.0070]
Residual: [.51]

Security Deposit: [$0]
Total Due At Signing: [$0]
Monthly Payment (incl. tax): [$369.69]

Zip Code: [21146]
Sales Tax Rate: [6%]

Email From Dealer:

I have a few options for you. We got $8,000 for your trade which also decreases the taxes by $400. If I do a 36 month for 12,000 miles which I believe is more than enough for you to have a peace of mind, your payment would be $369.69 a month. This is with no money down from you.

Now since you have a trade, you can actually get money back. We can apply 7,000 out of the 8,000 trade value to the lease and give you back a check for $1,000 which would make your payment $399 a month. We can give you back as much as you want out of that trade value if you are comfortable with a higher payment and would like money to put in the bank.

The MSRP on the Jeep is $43,975 and we are selling it to you for $39,249. We also got $7,000 for your trade but I got Drew to call another buyer and they want it for $8,000 so we are giving you all of that! Residual is .51 for the 12k miles and rate/money factor is 0.0070 for the 36 months. I should have checked my email before I left I’m sorry I got rushed out of there but I can send you residual value (what it would be to buy it at end of lease) when I get in tomorrow morning at 8:30.

2

First navigation 5.0 check to make sure its the 8.4 inch screen. Second, there has to be some sort of rebate on the jeep. Check jeep website and it would show it when you calculate lease payments. Search forum for other peoples deals on the car. But effectively you paying 610 a month all rolled in, and that is a bad deal to me.

1 Like
3

I’m sorry I’m not following you…$610 month all rolled in?

4

Yes, 8000 trade in equity amounts to 240 a month. That makes effective monthly payment 610.

5

I see, not good!

What are my options? I haven’t bought a car in 10years and need all the help I can get.

Thanks - Jane

6

Where are you located? Maybe deal with a broker? Benedetto and nyclife are two that usually post here.

7

Take the old car to carmax and have it appraised or go to kbb and get the trade in value so we know whether 8k is a fair value or not

8

I’m in Annapolis, Maryland.

KBB trade-in value for old car is $7-8k, private party is $8600

9

Just out of curiosity why a jeep? For 44K your options expand considerably from Mercedes GLA, a toyota highlander, honda pilot, lexus nx, acura rdx or mdx, etc.

Some of which have better residuals, money factors, and incentives right now.

As for your current deal, its not great. The dealer has not applied any incentives and is basically taking 7k as a cap cost reduction. This is way too much money down for $370 a month.

For comparison, my Lexus ES was MSRP: 44639 + I added $1950 that I owed on my old car and my payments are $389 with $1000 down + $800 in refundable MSDs.

10

Except for current Honda, I’ve always driven Ford or Jeep and really like them.

Thank you for breakdown, I need to read up to better understand cap cost reduction!

11

Cap cost reduction is just any payment not made by the dealer. So for example, incentives (paid to the dealer from corporate) and customer down payments. You should NOT count this in the selling price.

You should want the dealer to discount the car as much as they can. This is called the “selling price.” Incentives are paid back to the dealer from corporate.

The rest is then up to the corporate financing office although the dealer can increase these numbers to screw you and pocket the difference.

Money factor is interest. To get actual % values you’re used to multiply the money factor by 2400. You should go on Edmunds forums to find out the BASE money factor for your state, mileage allotment and months.

Residual value is how much the bank thinks the car will be worth after your lease. This number CANNOT be changed and is based on MSRP. The higher the residual, the better.

12

So…MSRP $43k down to selling price $39k isn’t enough. Should it be $43k MSRP minus trade-in value of $8k for selling price $35k?

never mind, I just re-read your paragraph above…So for example, incentives (paid to the dealer from corporate) and customer down payments. You should NOT count this in the selling price.

13

The trade in value should not be in the equation at all at this point. You want them to give you the best price period. Then throw in the trade in. Hold on I’m looking to see average discounts on Jeep Grand Cherokee

14

Ok, got it! I really appreciate your help.

15

Yeah I gotta eat my words. It looks like you’re below the average selling price in your area already. So you already got them in a good place. If you can get a lower selling price, go for it but it’s not likely they’ll drop by another 2K. Maybe $200-$1000 if you’re lucky.

But it looks like they may be lying to you about your trade in value because corporate IS currently offering rebates.
http://www.autobytel.com/jeep/grand-cherokee/2017/incentives/

Conquest Bonus $ Offer
Requirements and Restrictions:
Conquest Customer Bonus Cash is available towards leasing or retail purchases to current lessees of a competitive brand (non-Alfa Romeo, Chrysler, Dodge, FIAT, Jeep or Ram vehicle). If the vehicle has already been turned in, then it must have been returned within the past 30 days to qualify. Trade-in not required. This offer is not combinable with any Returning Lessee, Lease Loyalty, or Owner Loyalty Program. Offer is transferable to immediate family members residing in the same household.
Bonus $ Offer Type Start End
$1,000 Conquest 08/18/2016 01/02/2018

16

So, $39,249 is decent selling price, right?

But, what is it about trade-in that isn’t right? The amount?

17

Yes. $39249 is decent according to truecar.

It’s very fishy that chrysler is offering no incentives on jeep right now. With 2 minutes of googling I found $1000 you’re eligible for already. So make sure they subtract that at least from the total price.

Get up to $2,750 Cash Allowance
On a 2017 GRAND CHEROKEE LIMITED 4X4
Mid-Atlantic 2017 Bonus Cash MACHA[1] $250
Mid-Atlantic BC Retail Consumer Cash 35CH1[2] $2,500
Total Cash Allowance $2,750

(1) Mid-Atlantic 2017 Retail Bonus Cash MACHA1 Residency restrictions apply. See dealer for details. Must take retail delivery by 07/31/2017.
(2) Mid-Atlantic Chrysler Capital 2017 Bonus MACH5 When financed through Chrysler Capital. Not all buyers will qualify. Residency restrictions apply. See dealer for details. Must take retail delivery by 07/31/2017.
(3) Mid-Atlantic 2017 Bonus Cash MACHA Residency restrictions apply. See dealer for details. Must take retail delivery by 07/31/2017.

Conquest Bonus $ Offer
Requirements and Restrictions:
Conquest Customer Bonus Cash is available towards leasing or retail purchases to current lessees of a competitive brand (non-Alfa Romeo, Chrysler, Dodge, FIAT, Jeep or Ram vehicle). If the vehicle has already been turned in, then it must have been returned within the past 30 days to qualify. Trade-in not required. This offer is not combinable with any Returning Lessee, Lease Loyalty, or Owner Loyalty Program. Offer is transferable to immediate family members residing in the same household.
Bonus $ Offer Type Start End
$1,000 Conquest 08/18/2016 01/02/2018

So make sure that they’re not rolling the extra $3,750 into your trade in.

If you tell them about the incentives then they say that the honda is actually in worse shape then they’d imagined, you’ll know why.

18

Let me try this one more time.

MSRP 43,975
selling price is 39,249
The difference would be considered dealer discount, right? Out of the gate they are saying…we’re giving you $4726 off price of car.

Should I aim for this:

MSRP: $43,975
Dealer Discount: $4,726
Cash Allowance: $2,750

19

Anyways to summarize on the leasing calculator I get your Ultimate deal should be $235 a month with $0 driveoff.

MSRP: 43975
Sales Price: 39249
Untaxed Incentives 3750
Down Payment 6300 (to get drive off of $8000 for your honda.)
Acquisition $795
Residual 52% (from last month please ask for this month on edmunds)
Months 36
Money Factor: .00001 MF. (from june Please ask on edmunds)
Doc fee: 495
License: 400
Sales Tax 9

20

Yes but how much did it cost them to get the car? And how much are they making? You’re giving them a Honda worth $8000 so they’re already going to sell the honda for $10,000. So now your discount is 2726.

That’s what you’re trying to get down to is to give them the least amount of money.