Jeep Wrangler 4xe Forum banner
1 - 20 of 27 Posts

·
Registered
Joined
·
4 Posts
Discussion Starter · #1 ·
I test drove a used Rubicon this evening, the dealer website had it listed for just under $68k, but the original sticker was $62k. The sales guy also was required to tell me that this was a buy back vehicle due to lemon laws but everything was fixed. So I know that the market is crap right now, but this can't be normal right? Am I crazy, or who would by a refurbished used car for $6k over the original sticker?
 

·
Registered
2021 Rubicon 4xe
Joined
·
1,213 Posts
I test drove a used Rubicon this evening, the dealer website had it listed for just under $68k, but the original sticker was $62k. The sales guy also was required to tell me that this was a buy back vehicle due to lemon laws but everything was fixed. So I know that the market is crap right now, but this can't be normal right? Am I crazy, or who would by a refurbished used car for $6k over the original sticker?
No one in their right mind! Walk away… or, Make an offer and see what they say. You can order a brand new 2022 for less than that.
 

·
Registered
Joined
·
56 Posts
When I was shopping for my 4XE a few weeks ago, the first one I found was already sold but to an employee so they allowed me kindly to test drive it. That said they wanted $3500 over MSRP for an ordered 4XE -- I laughed at them and walked away. Then calling around I found 2 other dealers who had just sold their only 4XE, but were willing to order one for me, at sticker price. I finally drove 90 miles away, for an inventory new 4XE with the best deal/discount/lease option I could find. Shop around for sure---

PS: I've seen used 4XE selling at 95% of MSRP -- at least here in Ohio -- and I am < 2 hour drive away from Toledo plant where they are built. It is crazy... but with a 3+ month wait for a new Jeep, the market demand is such that < 1 yr old vehicles are selling darn close to MSRP still.
 

·
Registered
Joined
·
168 Posts
When I was shopping for my 4XE a few weeks ago, the first one I found was already sold but to an employee so they allowed me kindly to test drive it. That said they wanted $3500 over MSRP for an ordered 4XE -- I laughed at them and walked away. Then calling around I found 2 other dealers who had just sold their only 4XE, but were willing to order one for me, at sticker price. I finally drove 90 miles away, for an inventory new 4XE with the best deal/discount/lease option I could find. Shop around for sure---

PS: I've seen used 4XE selling at 95% of MSRP -- at least here in Ohio -- and I am < 2 hour drive away from Toledo plant where they are built. It is crazy... but with a 3+ month wait for a new Jeep, the market demand is such that < 1 yr old vehicles are selling darn close to MSRP still.
96% here for an ordered Rubicon. I am optioned up and assume it will take longer than 3 months for mine.
 

·
Registered
Joined
·
56 Posts
96% here for an ordered Rubicon. I am optioned up and assume it will take longer than 3 months for mine.
96% meaning you got a 4% discount? Not bad!

FWIW... I ended up with a short team lease on my 4XE. I plan to probably ditch it in the spring (that is my thing; I swap cars every 6 months... its a bad/expensive habit). But based on my math, with the tax credit and such, I should break even or potentially even make $$ come spring time with this crazy market. We'll see....

With the 3+ month waits for a Jeep, and Wranglers hold great value as-is ... low risk option/gamble at the moment.
 

·
Registered
Joined
·
267 Posts
96% meaning you got a 4% discount? Not bad!

FWIW... I ended up with a short team lease on my 4XE. I plan to probably ditch it in the spring (that is my thing; I swap cars every 6 months... its a bad/expensive habit). But based on my math, with the tax credit and such, I should break even or potentially even make $$ come spring time with this crazy market. We'll see....

With the 3+ month waits for a Jeep, and Wranglers hold great value as-is ... low risk option/gamble at the moment.
I have the same sickness. 😂
 

·
Registered
Joined
·
168 Posts
96% meaning you got a 4% discount? Not bad!

FWIW... I ended up with a short team lease on my 4XE. I plan to probably ditch it in the spring (that is my thing; I swap cars every 6 months... its a bad/expensive habit). But based on my math, with the tax credit and such, I should break even or potentially even make $$ come spring time with this crazy market. We'll see....

With the 3+ month waits for a Jeep, and Wranglers hold great value as-is ... low risk option/gamble at the moment.
My sickness is 3 years.

You don’t get the tax credit if leasing so how does that work out for you?
 

·
Registered
Joined
·
56 Posts
My sickness is 3 years. You don’t get the tax credit if leasing so how does that work out for you?
Tax credit is part of the lease, as if I had put another $7500 down on the car. So my ~$58k 4XE currently has a buyout of $51k at the moment. Given the fact that within 300 miles of me there are a few '21 4XE used (1k-8k miles) at 90-95% MSRP -- I could sell it right now for profit or at least break even. Had I bought the car I'd have put $7500 down but also had 8% sales tax (based on where I live) -- so leasing made more sense in this instance. Either way the $7500 got applied.

@Snazzberry27 -- I think John meant "I" dont get the tax credit personally -- but yeah, the tax credit as I noted above is still part of the deal, and in many ways "better" since its instant gratification --
 

·
Registered
Joined
·
168 Posts
Tax credit is part of the lease, as if I had put another $7500 down on the car. So my ~$58k 4XE currently has a buyout of $51k at the moment. Given the fact that within 300 miles of me there are a few '21 4XE used (1k-8k miles) at 90-95% MSRP -- I could sell it right now for profit or at least break even. Had I bought the car I'd have put $7500 down but also had 8% sales tax (based on where I live) -- so leasing made more sense in this instance. Either way the $7500 got applied.

@Snazzberry27 -- I think John meant "I" dont get the tax credit personally -- but yeah, the tax credit as I noted above is still part of the deal, and in many ways "better" since its instant gratification --
This is what I meant. I have no idea how to sell out if a lease early. Leave that to you!
 

·
Registered
Joined
·
50 Posts
Tax credit is part of the lease, as if I had put another $7500 down on the car. So my ~$58k 4XE currently has a buyout of $51k at the moment. Given the fact that within 300 miles of me there are a few '21 4XE used (1k-8k miles) at 90-95% MSRP -- I could sell it right now for profit or at least break even. Had I bought the car I'd have put $7500 down but also had 8% sales tax (based on where I live) -- so leasing made more sense in this instance. Either way the $7500 got applied.

@Snazzberry27 -- I think John meant "I" dont get the tax credit personally -- but yeah, the tax credit as I noted above is still part of the deal, and in many ways "better" since its instant gratification --
So you’re buying it then? That’s the only way to somehow break even, right? Walking away from the lease won’t benefit you at all.
 

·
Registered
Joined
·
56 Posts
So you’re buying it then? That’s the only way to somehow break even, right? Walking away from the lease won’t benefit you at all.
Incorrect. I’m leasing it. You can sell or trade early from a lease just like a loan. And my lease payment is less than my loan payment. And since the $7500 gets applied to lease at time of purchase unlike loan waiting for whenever you would owe, it’s better in this case. Hope this makes sense but if not happy to explain further.
 

·
Registered
2021 sahara 4xe granite crystal metallic
Joined
·
30 Posts
Incorrect. I’m leasing it. You can sell or trade early from a lease just like a loan. And my lease payment is less than my loan payment. And since the $7500 gets applied to lease at time of purchase unlike loan waiting for whenever you would owe, it’s better in this case. Hope this makes sense but if not happy to explain further.
Can you please explain this in more detail. Im planning on leasing a fully loaded sahara 4xe. It will arrive to dealer this weekend. And this is my first car i lease. Thanks in advance for the knowledge.
 

·
Registered
Joined
·
56 Posts
Can you please explain this in more detail. Im planning on leasing a fully loaded sahara 4xe. It will arrive to dealer this weekend. And this is my first car i lease. Thanks in advance for the knowledge.
Whether you buy a car cash, purchase the car with traditional financing (loan), or lease the vehicle, you are always able to exit the vehicle prior to the end of that contract. However, there are various loopholes that might make your exit strategy a little more complicated. Let me elaborate:

Assuming you purchased the car for cash, the title of the car is your own. You can do whatever you want with it, and sell it for whatever price you want at any time. Second to that would be a conventional loan. Some loans will have a "prepayment penalty" (usually a few hundred dollars) that you must pay if you terminate the loan within the first 12 months (or similar). Loan payoff is based on the interest rate and amortization schedule. Your first loan payment has a higher interest-to-principal ratio than your last payment, such that loans are always "interest front heavy" -- but you can sell your car and pay off that loan any time you want. Payoff is calculated based on remaining principal, early payoff fees if applicable, etc. This Is pretty standard fare and most people are well aware of this. How much you owe versus the sale/trade value would be your equity (positive or negative).

Side note: traditionally a used car would lose 10-15% of its value in the first year, about 25% of total value after 2 years, and 35-40% of face value by 3rd year. However, today's market is just crazy and abnormal. I've seen used cars that are 1-2 years old selling at 95-100% of original value.

Now... to answer your specific questions about leasing ---

When you LEASE a car, you are only paying down the depreciation of the car. For example, in the case of my 2-year lease on my 4XE -- the car will be worth 74% of MSRP at the end of the lease. My monthly payment is the other 26% (spread over 24 months), plus interest (the bank's income/fees) and sales tax (in my case 8% for the county/state that I live). As a good "rule of thumb" if you are leasing a car I always tell people the 36 month lease payment usually hovers right around 50% of the car's value (if you lease a $36,000 car, your payment would be around $18k over 3 years inclusive of tax/interest, or around $500/mo) ($500 x 36mo = $18,000).

In your lease contract it states that you are entitled to buy the car at any point during the lease for the residual value, plus any remaining payments. Normally the bank will remove the interest from those payments, too -- such that the residual value (the predetermined value of the car at the end of the lease) plus the principal-only of your remaining payments, is the value of the car. There are closed-end leases, where you can buy the car out any time during the lease, but also have the option to walk away. Open-end leasing (see Putnam and other high end exotic car leasing) often do this, since they don't actually want the car at the end of the lease. You rarely find open-end balloon payment leases in conventional purchases.

Historically (read: before pandemic and used car market pricing jumped), the same price -you- could buy your lease was the price the dealership could buy it for. And the benefit there was sales tax. Again remember on your lease payment you're only paying the tax on "each payment" -- but when you go to buy the car, you'd have to pay your sales tax on the FULL (remaining) sale price of the car. Hence, having the dealership buy your lease out made more sense. However, as the secondary market has taken off in a strange way, the price quotes that dealerships are getting has gone really high. You'll find places like Carvana/etc are even sharing pages on their site explaining that they can no longer buy-out your lease, because the leasing company has raised the dealer price. They can NOT do this to you, as you have a contract with the leasing company that agreed on prices, but for 3rd party sales (read: trade-in to dealer) the leasing company can "do whatever they want" -- so to avoid this, you MAY be forced to buy your own lease out (and pay sales tax) and become the 2nd owner, before you can sell it.

Another two ways to exit your lease exist. One of them would be to make your remaining payments. Often times when you hear about "we'll get you out of your lease" -- if you read the fine print, there is basically just a $2000 rebate (for example) on the table. So let's assume you have 4x payments at $500 left on your car and want to trade it in. Basically what happens is your final payments get paid for by the dealer/manufacturer, and your car still gets traded back into the finance company. That dealer might not actually even KEEP the car-- they are simply paying off your lease and "trading it back in" -- and that $2,000 is often incentive money from their corporation, to help get new buyers in the door. Another option for exiting the lease is you making those same payments, too. In the case of my ?Jeep 4XE, my "payoff and turn in early" is only about HALF of my payments. Basically this covers HALF the deprecation and HALF the interest, but I honestly don't know how Ally has come to this value. Either way, when I log in, I see two payoff options: first is to buy the car outright, second is to make a one time payment and early turn-in.

TL;DR
  • There is always a DEALER trade-in/payoff on a lease, just like a loan
  • Historically, that price was no different than a loan (often less b/c of sales tax)
  • Currently, there are some issues with exiting early by means of trade-in
  • Often times you can buy the car, and then resell it, right now, easier

PS: MSRP on my 4XE was $57k but thanks to the $7500 credit, even after making just my first payment, the current payoff for me to BUY my 4XE is only $51k. Even if you add in my 8% sales tax, that means I could turn my lease into a loan for $55k -- or about 5% off MSRP. Based on the 3-4 month wait for a new 4XE, chances are good I could actually buy-and-sell my vehicle breaking even. Better yet, in 6 months, if the market is still the same (and remember, 4XE prices just went up a week ago) -- I'd likely be able to sell for break even at any point. Whereas, had I taken out a loan of $57k+tax = $62k ... I'd be upside down.
 

·
Registered
Rubicon 4xe
Joined
·
32 Posts
Well explained, @Shaka !

I just picked up my first lease, a Rubicon 4xe. Had a great experience using a broker. Not sure if that's always best practice with a lease to use a broker, but it sure seemed optimal. It was so nice not have to deal with the dealership much at all. Only had to talk to them for minor financial stuff and shipping the vehicle. 9.5% off MSRP (order placed in August). No games, all terms set up with the broker were honored at close without mention.

I would go this route again in a heartbeat. But I've only had it for three days, so.
 

·
Registered
Joined
·
43 Posts
which broker did you go with?

Well explained, @Shaka !

I just picked up my first lease, a Rubicon 4xe. Had a great experience using a broker. Not sure if that's always best practice with a lease to use a broker, but it sure seemed optimal. It was so nice not have to deal with the dealership much at all. Only had to talk to them for minor financial stuff and shipping the vehicle. 9.5% off MSRP (order placed in August). No games, all terms set up with the broker were honored at close without mention.

I would go this route again in a heartbeat. But I've only had it for three days, so.
 

·
Registered
Rubicon 4xe
Joined
·
32 Posts
Just to post publicly, I used Clutch and I would recommend working with them.

There are other broker options out there, it's probably best to check with most of them to see who has the current best deal. I get the feeling the MSRP discount matters greatly per what dealership the broker is working with.
 
1 - 20 of 27 Posts
Top