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Old 07-08-2012, 11:54 PM
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Lemon Risk Management (LRM)

I'm a long-time Jeep owner, my first Jeep I still have and it's been the best vehicle I've ever owned. The downside is the damn thing is 21 years old and I know it won't last forever - although I just learned I can buy a 4.7L I-6 Stroker from Mopar - it will probably get that someday.

But moving on with life, I know it's limited due to age and it's not really a daily driver any more - kinda like me. My Jeep is tired and so am I ...

Therefore, after one Toyota Land Cruiser, one Lemon Law and subsequent buy back of this highly acclaimed Land Cruiser, two Grand Cherokee SRT8's.. one that developed a shutter after 5K miles and one that was near perfect - I now want to manage the risk of ownership.

When vehicles were $25K and every option wasn't tied into multiple microprocessors to make all those things run, I didn't mind assuming the risk of long term ownership. I consider today's vehicles as the disposable bunch - as soon the chips in ECM's, PCMs, TCMs and whatnot are obsolete - so is the vehicle.

So my thoughts are to order a WK2 Overland and put it on a two-year lease to test the waters - if it's a flawless Jeep, shutter free, then I will buy the vehicle after the two-year term.

I've never leased before, so if there are any downsides to my Lemon Risk Management (LRM) proposition, common sense and sound advice are welcomed.

Thanks.

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  #2  
Old 07-09-2012, 10:12 AM
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Re: Lemon Risk Management (LRM)

Sounds smart with todays quality enviornment.. actually sounds necessary..
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Old 07-09-2012, 11:44 AM
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Re: Lemon Risk Management (LRM)

Bob!

Whats up man?!

Yeah leasing the WK2 is a good idea for a trial period if you really dont want to commit to buying. You're under a warranty in case anything goes wrong and at the end of the trial period, if you dont like it, return it.
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Old 07-09-2012, 12:06 PM
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I'm leasing for the same reason. This is also my first Jeep though so I want to be able to see how reliable the WK2 can be with all the reliability problems I hear about with previous Jeeps.

I will say though that because of this I am slightly more hesitant to make any significant mods, in case I do turn it back in at the end of the leasing term.
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Old 07-10-2012, 09:30 PM
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Re: Lemon Risk Management (LRM)

Well, first of all you're likely going to spend more money to lease it than you would on just trading in the vehicle in if it had issues or dealing with it. Especially considering the terrible lease rates Jeep is offering on the GC, it's throwing money away.

Secondly, you're not really accomplishing anything, except giving yourself an out at 2 years. You could get out at any time normally, but having a lease means you may be subject to early termination fees if you get a bad one anyways and have to trade out of it.

Thirdly, most issues won't crop up in the first 2 years. And if there are issues, it's clearly under warranty to have them fixed.

Personally, I don't see the point to it. It's not really avoiding any risk, and is only potentially keeping you financially more locked into a vehicle.
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Old 07-10-2012, 11:27 PM
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Re: Lemon Risk Management (LRM)

Quote:
Originally Posted by Robert Palmer View Post
Bob!

Whats up man?!

Yeah leasing the WK2 is a good idea for a trial period if you really dont want to commit to buying. You're under a warranty in case anything goes wrong and at the end of the trial period, if you dont like it, return it.

Hi Joe, finally made it over here.... still undecided what I'm going to do.

Your Jeep is looking nice in that photo.

.
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Old 07-10-2012, 11:56 PM
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Re: Lemon Risk Management (LRM)

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Originally Posted by FAUEE View Post
Well, first of all you're likely going to spend more money to lease it than you would on just trading in the vehicle in if it had issues or dealing with it. Especially considering the terrible lease rates Jeep is offering on the GC, it's throwing money away.

Secondly, you're not really accomplishing anything, except giving yourself an out at 2 years. You could get out at any time normally, but having a lease means you may be subject to early termination fees if you get a bad one anyways and have to trade out of it.

Thirdly, most issues won't crop up in the first 2 years. And if there are issues, it's clearly under warranty to have them fixed.

Personally, I don't see the point to it. It's not really avoiding any risk, and is only potentially keeping you financially more locked into a vehicle.

Well, there's the I don't give a shit factor with a lease, you really don't have a stake in the game other than some nominal up front fees... then after two years turn it back and walk.

After you drive a new vehicle off the lot you lose minimum $6K.. and that's on a vehicle that's trouble free. You can get out of it sooner, but you still need to incur the costs of ownership. Have you ever tried to unload a lemon? This is the issue at hand. If I had confidence in the brand, I would just lay down $20K and make payments for five years with no worries -- with the thought I'd own it for ten years.

The lease should have fixed costs over two years with a residual based on known factors, correct?

The dealer can't offer you less than what's stated on the contract if it turns out to be a lemon, correct?

Like I said, I've never leased before other than for business stuff.

.
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Old 07-11-2012, 09:07 PM
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Re: Lemon Risk Management (LRM)

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Originally Posted by a990dna View Post
Well, there's the I don't give a shit factor with a lease, you really don't have a stake in the game other than some nominal up front fees... then after two years turn it back and walk.

After you drive a new vehicle off the lot you lose minimum $6K.. and that's on a vehicle that's trouble free. You can get out of it sooner, but you still need to incur the costs of ownership. Have you ever tried to unload a lemon? This is the issue at hand. If I had confidence in the brand, I would just lay down $20K and make payments for five years with no worries -- with the thought I'd own it for ten years.

The lease should have fixed costs over two years with a residual based on known factors, correct?

The dealer can't offer you less than what's stated on the contract if it turns out to be a lemon, correct?

Like I said, I've never leased before other than for business stuff.

.
The dealership isn't going to think it's a lemon unless you TELL them it's a lemon, nd you're dying to get out of it. You tell the dealership that you enjoyed the vehicle but are just looking for something else. If you act desperate, they're going to rip you a new one because they know they've got you.

When you lease it, after 3 years or however long, you turn it back in. You get nothing out of it, you just walk away. You can buy it out, but usually you will only end up spending more money to buy it out than if you had just bought it outright. So they're not going to "offer" you anything, they're just going to say "you can buy it for this or we can keep it".

I guess I don't see the value in it, you're fixed to a 3 year term or whatever you choose (FWIW, leasing for less than 3 years tends to be hugely expensive). If you negotiate a good purchase deal, you shouldn't be out a huge mount of money if you sell it, immediately, but that's not even an option for a leased vehicle.

It's commonly held that if you flip cars a lot, leases are better. But realistically, nowdays a lot of vehicles will net you a positive equity before a typical lease term is up. About a year ago, a friend and I had this same conversation over lunch (looking at Durango R/Ts), we calculated that after 2 years of ownership, trading the vehicle in, you're actually better off than if you lease it for 2 years and turn it in for no gain. The positive equity was enough that it offset the slightly higher payments.

The main reason to lease a car nowdays is to look like you can afford a vehicle you truly can't, or if you have a business you can write off lease payments in some cases.

You're looking at it as risk mitigation, when all it does is lock you in to the risk. If you get a lemon as a lease, you're stuck with it for 3 years or whatever the lease term is. If you purchase it and you get a lemon, you can trade it in at any time for whatever value it has. The question is if you'd rather have to put up with a lemon for 3 years, or if you'd like the ability to get rid of it without the suffering.

I guess the point I'm trying to make is that you're not going to lose as much money as you think trading out of a newer, very popular vehicle. If you get your Overland at invoice, it wouldn't surprise me if you were able to get out of it for 1-2k less than you paid after 6 months to a year. Many of these used vehicles are selling for near or over their invoice prices, so the right dealer will give you the right price.

And FWIW, Jeep's lease rates are terrible. You can just about lease a Lexus GX460 for the same price as a GC Overland. The payments on a brand new Overland worked out to about the same as the lease payments, except with no positive equity.
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Old 07-11-2012, 09:42 PM
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Re: Lemon Risk Management (LRM)

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Originally Posted by FAUEE View Post
. You can just about lease a Lexus GX460 for the same price as a GC Overland. The payments on a brand new Overland worked out to about the same as the lease payments, except with no positive equity.

I coulda been drivin a red one right now??? dam dam
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Old 07-14-2012, 07:34 PM
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Re: Lemon Risk Management (LRM)

biggest problem I see is not being able to mod it. If you want to take it on trails some basic mods left of the factory models like suspension, tyres and winch point. Which the lease company won’t insure.

But if it is your bitumen cruiser lease is a great tax saver as well.
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