166k isn't too high of a mileage for a TJ with the 4.0L engine to not consider but that all depends on how well the previous owner took care of it. If you can determine through records it was properly maintained, it'd be a reasonable Jeep to buy. But if it has no records and it doesn't look well maintained, I'd be a little leery. Will it be your only vehicle, and do you envision turning it into an offroad beast?
Generally speaking though, the six cylinder 4.0L engine has an outstanding reputation for longevity and you'd probably get another 100k miles out of it before it needs an overhaul if, again, it was properly maintained.
I agree, if its clean and maintained no reason to worry about the motor. I've got 168k on mine now and it's still at the full mark between oil changes. The rear main seal was replaced just before I bought it though.
Mileage wise though they can suck. My 03 rubicon with 5spd when it was stock got 20mpg on the freeway. After lifting and adding 33" tires I get about 14.
I bought an 03 X with 117k and it runs perfect...so far. It was well maintained and barely used the last 5 years. Just take care of it. I added 245/75/16 M/T with Moab rims and gas mileage is still decent.
If you are where the roads are salted in Winter, check the frame and body for rust. How much are they asking for that Jeep. With that mileage you probably shouldn't go over $6k unless it is super clean.
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