Things to Avoid
Behind the early four-cylinders was an AX-4 then AX-5 manual. Both stick boxes are weak and should be avoided if possible. In the '87-'89 models a Peugeot BA-10 manual transmission was placed behind the six-cylinder. Unlike the AX-5, which is simply weak, the BA-10 is a poorly built gearbox that brings more headaches than it's worth.
Things to Look For
The AW-4 automatic transmission came on the scene in the '87 model and remained behind the powerful inline-six until the '01. The Aisin-Warner units are beefy autos and usually trouble-free as long as basic care and maintenance have been followed. Those of you who love the freedom of the gearshift will want to look for '89 and newer XJs equipped with the AX-15. While the highly desirable NV3550 manual made an appearance in the '00 model, you aren't likely to find many floating around.
Things to Avoid
Most of the '84-'91 XJ's high-pinion Dana 30 front axles came equipped with a vacuum disconnect system. These old-style disconnect systems can be problematic, especially as time wears on. There are a few upgrades and options to improve or bypass this system, such as swapping in a one-piece passenger axleshaft along with a new seal, but you are still left with the cast disconnect housing on the axle.
From the '89 model forward, ABS was an option on all Cherokees. If you can find one without the brake nanny, you're in luck, as the ABS systems don't work stellar off road. Also, if you are planning an axle swap, you may end up dealing with a ABS light on the dash.
The Dana 35 rear axle is never an exciting sight for an off-road enthusiast and was placed under that back of the Cherokee throughout its long run. The last two years of the Cherokees production offered a weaker low-pinion Dana 30 front axle. Looking back, we now know that the low-pinion front axle borrowed from the TJ parts line signaled the end for the XJ.
Things to look For
Some of the '87-'89 Cherokees with the towing package received a Dana 44 rear axle, which is always a bonus, but is pretty rare. The more common and strong rear axle to look for is the 29-spline Chrysler 8.25, which appeared in the mid to late '90s. Look for the 8.25-inch rear axle to be more squared off than the rounder Dana 35.
Up front the stronger 297 front axle U-joints made their first appearance in '89 Cherokees equipped with ABS and became standard in '97 and newer Dana 30 front axles. The '91-'99 high-pinion Dana 30 front is a great axle, as the stronger U-joints, reverse-rotation gearset, and high-clearance front shaft make it great for a builder who wants to stay on a 35-inch or smaller tire.
While interior can be a personal preference, we are big fans of how much cleaner the '97-'01 dash looks. That's not to say the '84-'96 interior looks bad, but when you compare both side by side, the older style really looks dated. Both setups are very functional and comfy, offering plenty of room for four people and gear. Though in 1997 the body style was made a bit rounder, the overall layout and visibility of the platform remained the same.
It's not uncommon to see the hatch of older Cherokees cracked around the window and edges. Until the '97 model all XJ rear hatches were made of fiberglass. They were switched to steel for the remainder of the platform's life.