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Discussion Starter #1
Hey guys,

I do a lot of reading on these forums but heres my first post. Im looking to get back into a Wrangler and am back at school so budget is a huge thing for me right now. I don't want to lease and the salesman mention balloon payments as an option.

Any thoughts, experiences, or advice on possibly doing balloon payments for a Unlimited Sport?

Thanks
 

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There are open ended or "smart leases" sometimes where you are technically leasing he vehicle, but at the end you have the option to turn/trade in or pay/*refinance* what's called the "balloon payment", which takes into account the depreciated projected resale value of the vehicle, plus or minus other factors. Once the balloon payment has been achieved, you own the vehicle outright.

Ultimately, with most JKs, doing a smart lease with a balloon payment would come out to $2-5K more in total cost-to-own than doing straight finance, because with a smart lease you end up taking up to 4-6 years longer than the original lease to pay off the vehicle (aka more interest).
 

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Shit on a balloon style, of payments. some of them increase every year over the term. others can stay the same (payment) till the last, which can be several thousand.

Not actual numbers, but you git the jist. $400-450 a month for x amount of years. last payment $3000-8000. Eff that. Do you really think you'll have that kind of money laying around?

For example: A new car buyer borrows $40,000 over 5 years and elects to have a $10,000 (25%) Residual Value/Balloon Payment on their loan. Their monthly repayments will be lower than if they had no Residual Value/Balloon Payment, however they will still owe the financier $10,000 at the end of the 5 year loan.
Car Loan Balloon Payments & Residual Values Explained ...


Play with it and see..
Balloon Payment Calculator

https://www.strattonfinance.com.au/car.../understanding-residual-values-bal...
 

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I would recommend avoiding any "creative financing". These schemes always wind up costing more in the long run then regular financing. When you have less money is the time to not waste any.

I drove a beater used vehicle in college. I'm sure you can find a beater used TJ.
 

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Discussion Starter #7
thanks guys.

The way he explained it is that although you do owe money at the end, jeeps with their strong resale value are sometimes worth more than what you owe at the end. If you don't want to keep the car then you can trade it in or sell it and pay off what you owe.

He said they don't make sense for most cars, but work for Jeeps because they hold on to there value so well.
 

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As a student... if you do not have the cash to buy it.... walk !!

Buy something you can own. Not something you need to finance.
Better on a bicycle with beer money than in a new car you cannot afford the gas for... or insurance... or tires... or oil changes.
 

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I would recommend avoiding any "creative financing". These schemes always wind up costing more in the long run then regular financing. When you have less money is the time to not waste any.

I drove a beater used vehicle in college. I'm sure you can find a beater used TJ.

Solid advice!
 

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Discussion Starter #11
Im unfortunately a 28 year old student haha working on that masters..

thanks for the advice fellas/ladies

want that jeep again and love the 4 door (makes more sense for my lifestyle as well)
 

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I did financing in dealerships for years. Balloon payment used to be a way that dealers would lease a car and then have a bigger payment due at the end. The benefit was a low monthly payment. I saw alot of these done on the old toyota pickups, in most cases the payment was super low and the last payment was more than the car was worth.
This would not be any choice that I would take unless you would have some something like a cd that would mature and were going to use it to pay off the rest of the note.
 

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Im unfortunately a 28 year old student haha working on that masters..

thanks for the advice fellas/ladies

want that jeep again and love the 4 door (makes more sense for my lifestyle as well)
So you've been in college for 10 years? I never went to college but at my 10 yr class reunion there was 1 guy still in and he called himself a career college student!! Just curious, what requires that much college? A brain or heart surgeon?? Btw I'm not trying to sound like a smart ass by any means, you're just 2 years younger than me and I'm very curious.
 

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Discussion Starter #14
So you've been in college for 10 years? I never went to college but at my 10 yr class reunion there was 1 guy still in and he called himself a career college student!! Just curious, what requires that much college? A brain or heart surgeon?? Btw I'm not trying to sound like a smart ass by any means, you're just 2 years younger than me and I'm very curious.
Nah don't worry about it, you don't sound like a smart ass at all.... lol

I said in the first post that I went back to college... I haven't been in college all this time. Wish I was a surgeon. Wouldn't have to worry about any of this financial stuff haha
 

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Hey guys,

I do a lot of reading on these forums but heres my first post. Im looking to get back into a Wrangler and am back at school so budget is a huge thing for me right now. I don't want to lease and the salesman mention balloon payments as an option.

Any thoughts, experiences, or advice on possibly doing balloon payments for a Unlimited Sport?

Thanks
NEVER do a balloon payment. Never ever!

The Fed will raise interest rates and your rate will go up with it. If there's inflation the rate can sky rocket.

Fix rate loans are the only ones you should ever take in your life. Never take an adjustable rate (ARM) or balloon.
 

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Yea... I chose to just go to work after graduating high school. 12 years, 2 kids and a divorce later, I'm happy and don't feel like I regret making that decision. I shouldn't give u any advice on acquiring the Jeep that u want since financing a brand new Jeep just to sit in the garage most of the time isn't the smartest thing I could be doing with my money either, in some people's opinion Lol, but I did do a regular finance thru a bank.
 

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I wouldnt do it. You literally just pay for the interest, then you have a HUGE payment after that. Then, the fun times begin, trying to scramble up the remaining actual balance (that you have not even made a dent in cause you just have been paying interest really).

It is like when people lease a car. Why not buy it? It is like people rent cars and make payments on it, but at the end of the day it isn't theirs.

Do what you want, but there is my 2 cents. Lol...
 

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I've worked in a dealer for the last 9 years and in F&I for the last 3, do not get into a balloon payment.... Any regular dealer will not even offer it, it's all about screwing the customer. If the dealer you are working with is pushing it find someone else to buy from!!!!!
 

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I've worked in a dealer for the last 9 years and in F&I for the last 3, do not get into a balloon payment.... Any regular dealer will not even offer it, it's all about screwing the customer. If the dealer you are working with is pushing it find someone else to buy from!!!!!
Not that this is the case with the OP, but wouldn't some dealers use this as a last resort to get a customer into a vehicle they wouldn't be able to afford otherwise as it lowers the monthly payment and they can get bought for the loan? I agree, I would NEVER sign up for this. Regardless of the vehicle make this is a great way to get upside down real quick. Getting upside down with negative equity can hurt you real bad in the long run on future vehicle purchases. If one has negative equity/upside down that is where GAP insurance is helpful right?
 

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Not that this is the case with the OP, but wouldn't some dealers use this as an option to get a customer into a vehicle they wouldn't be able to afford otherwise as it lowers the monthly payment and they can get bought for the loan? I agree, I would NEVER sign up for this. Regardless of the vehicle make this is a great way to get upside down real quick. Getting upside down with negative equity can hurt you real bad in the long run on future vehicle purchases.
Yes they would do it!!!!! That's a sign of a shady dealer... For a respectable dealer it's not part of the business practice. We rely on repeat business to make it, and I work for a dealer that delivers 300-400 cars a month. Some try to crush the customer once. They usually don't last long!
 
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