Ask Jim!

 I’m at the end of my lease soon. What should I do? 

Hi Jim,

I hope this finds you doing well.  You are a truly great guy for always wanting to help our family.  Please know that Rachael and I REALLY appreciate it.  We always feel comfortable when we refer friends to you! 

I have 2 payments left on my 2005 Grand Cherokee.  The lease is up 12/20/07.  It will have approximately 45,000 miles on it…which is right where it should be according to the contract.  They will be asking for $20,592.90 at the end of the term.  The car is loaded with extras…Chrome wheels, moonroof, GPS, DVD, 6 play CD, Satellite radio, V8 - (not Hemi), special paint, leather interior…etc.  I just replaced the battery, and will have to put new tires on it soon.  It is also due for a major check/tune up (42,000 miles). I have had a couple of warranty claims.  

Normally I do not buy my leased cars, but it may work out this time to buy it if the price is right, and get a extended warranty from you.  I would also consider a new Toyota Highlander or Acura MDX, or a used Certified Lexus LX, but again we are talking $40 to $50K.  The Grand Cherokee may work best for a couple more years. 

What say you?? 

Thanks 

Michael 

Hey Michael,

Doing well thanks!

I enjoy helping good people and that is my reward if I can make a difference. I looked over your email and need some information.  I will then do some research before I give you my thoughts. First thing, what company has your lease (make payments to whom)? Does your lease contract have a termination fee or purchase fee at the end of the lease? (Most do) I will do some checking to see what the current values are on your vehicle and we will get a better picture of where we are.

Jim  

I leased the car through Endeavor, but John said Chrysler Financial had the best deal, so that is who the lease is with.  I can always fax it to you. 

There is a purchase processing fee of $150.00.  I am sure there is a drop off fee but I can't seem to find it in the agreement…probably about $250.00. If I do get a new car this time around I would probably finance as I plan to keep it for a long time (now that I am going to be 60!).  If I get a used car I may still finance a portion of it but not keep it for as long. 

I would want a used car to be manufacturer certified.  I need an SUV approximately the same size as the Grand Cherokee…and I want a comfortable one! 

M 

Hello Michael,

This is the age old question on leases coming to term and as always, there are many different factors to consider in your final decision.

1.    The residual on the Chrysler lease at term in December is $20,529 plus the sales tax and any fees.

2.    The present Kelley Wholesale Book (Sep-Oct) @45,000 miles is $19,450. Mid November the next KBB will be out and if like any other end of the year book on Jeep it will drop at least $500 or more.

3.    Our current Auction Results survey shows sales of like Jeep Limited's in 2wd:   

                          Silver Limited      52,223 miles sold @ $15,500                              

                           Black Limited     31,405 miles sold @ $18,200

     *There are many others in the same price range, but as shown above, mid November through January are usually slower for used car sales at auctions and this reflects on trade values. 

4.    My experience with most Lessors is that the residual value on the contract can be negotiated. They are aware of the market and have a large number of vehicles being returned at the end of the leases. They have the same access to auction results as we do and know that is where 80% of their returns end up. I would expect they would take some place around $17,000 or less.  

5.    Chrysler should be sending you, if they have not already, questions about purchasing the Jeep along with finance options at termination. They will give you a phone number to contact.  Wait until about 30 days before the end of the lease then make contact.  At that point you will be dealing with current values not what might be stale information. (The car is worth a little less every day right?) 

You know the Jeep, the miles are good, the worst of the depreciation is gone and if the price is right...? Well maybe it does make sense.  And Endeavor can still provide the financing. 

If they fail to make a deal with you, we still have plenty of time so we can check out the cars you mention. We have a great supplies of all of those but you are correct on the higher $$$. 

Feel free as always to call...877-727-4327 and keep an eye on our website inventory for other great deals. 

Happy Driving! 

Jim  

Stay tuned for Michael’s decision…