Thanks for all of your input!

So far most of the XJ's I've found in the lower price ranges (1-5K) have been 2WD models or very high mileage (>200K) 4WD models.

I'll keep looking though!

A question about the '00/'01 head cracking issue. Do they fail suddenly/dramatically or is it usually detected due to coolant loss/smell like a head gasket failure? I want a daily driver and don't want to get stranded.

 

Actually '99 is considered the best year to most. Newer body styling but doesn't have the problems of the 2000s and 2001s. It also has the higher flowing intake manifold. One thing I hate about my 2000 is it has the California emissions package, which came on a good number of 2000 and 2001 cherokees to try and meet lower emission standards. The California emissions package has three total cat converters. One before the muffler and two on the manifold in the engine bay. These extra cats create a lot more heat in the engine bay than other cherokees, especially during summer. Its what often causes the "hot soak misfire" on 00-01s.

To the OP, the cracked head will show its signs but not leave you stranded. If you monitor the coolant and oil levels then you should be able to catch it. Loss of coolant and milkshake colored oil is a common sign. If you drive around long enough with coolant in the oil, then it will ruin your bearings. I replaced mine with a different head just to avoid the issue. The head issue didn't steer me away from buying my 2000 which was in perfect shape, but its definitely an expensive repair and something to factor in when comparing prices.