Trade in question

[ppfd]

Purely hypothetical question here:

I buy my vehicles and pay them off and usually trade the paid off truck in on something new.
I've been looking around, purely looking.

So if I owe 19k on my ranger and found a vehicle for 50K. that's my payoff as of today. I pulled the other one out of the air.
I go and trade the truck on a negotiated price say, $35,000. For the other vehicle of a negotiated price., say $47000.
That money pays off my loan and I get the difference since I am not "upside down". I then can put the difference towards the new vehicle?

Am I looking at this right?

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[9zero1790]

Purely hypothetical question here:

I buy my vehicles and pay them off and usually trade the paid off truck in on something new.
I've been looking around, purely looking.

So if I owe 19k on my ranger and found a vehicle for 50K. that's my payoff as of today. I pulled the other one out of the air.
I go and trade the truck on a negotiated price say, $35,000. For the other vehicle of a negotiated price., say $47000.
That money pays off my loan and I get the difference since I am not "upside down". I then can put the difference towards the new vehicle?

Am I looking at this right?

thats how its worked for me. you would get the 16k to go toward the new car. so 31k for the new car if the deals worked as you posed. right now used cars are hot sellers so you might even shop around for buyers of the 5g ranger or even sell to different dealer than who you wish to buy the new car from.

 

[ppfd]

Just looking around. I'm about 99% sure I don't want a bigger or longer payment.
I wanted to see if my line of thinking was right. I've never traded in anything while I still was paying on it.
I work with a younger fella that seems to trade every year or two. I can't imagine the size of his car note!

 

[AzScorpion]

Yes that's how it works. Your loan gets paid off and the equity (balance) goes towards the deposit of the new vehicle.

I use to buy a new F150 every 3 years for business when I was back in MA. I did this for over 20 years but back then they really didn't go up in price year to year like they do today so the payment didn't change all that much. I didn't have a lot of miles on them and they were still spotless so I got top dollar for them on trade in. It helped too that I had a really good dealer and great salesman I use to work with. Plus the interest rates were much lower then too so the payment was close to the same unless I decided to put more money down. Usually I'd pay for the tax, title and fees and not roll them into the new loan.

 

[Dr. Zaius]

Check with multiple dealers as their offers can vary widely.

Also check with the online vendors that will make you a cash offer on your truck.

The ones I check are Carmax (usually the lowest), Vroom, Carvana, and Driveway.

Autonation will make an offer as well but I've never tried them.

Driveway usually makes the most generous offer, followed by Vroom and Carvana.

I just hate dealing with Driveway because even though I tell them to contact me by email only, my cell phone will start ringing by the time the webpage refreshes.

Keep in mind that if you sell your vehicle outright you will lose any tax incentives which work differently in many states.

Here in GA you only pay tax on the difference in price so it can be a pretty significant chunk of change.

For example, if you buy a vehicle for $50k and your trade-in is worth $30k, you only pay tax on the $20k differential.

Here, that $20k would amount to $1400 in tax.

If you sold your truck outright to get the new vehicle, the tax bill would be $3500 so make sure your cash offer would be enough to offset that $2100 tax differential

 

[Jason B]

I have been mulling the numbers the same way, although not ready for a new one yet.
I owe 14K on my '21. IF I could get 30K (what I paid) for it, that would be 16K towards the new one. No way I'm buying an unproven '24 6G Ranger. We'll see the values of trade in and new ones in MY 25-26.

 

[Tom_C]

Before I would trade in a vehicle today, I'd get a price from Carvana, carmax, and who ever else is out there. Never negotiate the price of a new car if they know you're trading anything in. Leave the new car price negotiation by itself. Get the price, then let them price your trade.

But, back to the point, you might be surprised by what you can get for the truck from carvana. When I bought my truck, I got 8K for an 11 year old Outback, and my trade was going to be 4k.

 

[ylwjacket]

also, and you may know, but they would deduct the entire trade value from the new purchase price, and you would pay tax only on that amount.

In your case, you pay taxes on 12k, then they add back in back in your payoff of 19k, with your new price of 31k plus taxes on 12k, if that all makes sense.

 

[Dr_Strangelove]

A really great example of being "upside down" is I buy a $80,000 BMW X5 4 years ago and want to trade it in for a new $80,000 X5 today, but I still owe $57,000 on my current X5 and they will only give me $35,000 on my trade. That's a negative equity of $22,000 which means my new X5 will cost me $102,000 because my current vehicle lost so much value.

It's very common on high end luxury cars like in my example because they cost quite a bit initially and then depreciate like stones. Fortunately for us, not so common with American trucks that aren't loaded to the gills.

 

[ppfd]

Tried carvona and the offer was pretty low.

 

[Wytchdctr]

I got two legit offers for 25k on trade. XLT 2 wheel drive. Almost 25k miles with minor dings on the body. I bet you 4x4 guys are seeing a hell of a lot better numbers.

Not bad for what it is; I could trade it and get money out of it.... but I have a great interest rate. Nothing out there that low, even if I wanted something else.

Hyundai comes close with their "in house" financing out to 60 months but I found out the "fix" on the santa cruz isn't a fix it just jams it into a gear when the trans fails vs going into neutral. Don't want to trade one thing with a possible trans issue for another with a trans issue..... then pay a bank more because shenanigans that I didn't create (credit score has gone up a good bit since I got the loan on the Ranger)

 

[Dr. Zaius]

Tried carvona and the offer was pretty low.

Right now my Vroom offer is almost $2k more than my Carvana offer.

If you're serious about selling, check with Driveway.

Just be aware that they are going to be on you like Lizzo on a buffet.

 

[jflogerzi]

I got two legit offers for 25k on trade. XLT 2 wheel drive. Almost 25k miles with minor dings on the body. I bet you 4x4 guys are seeing a hell of a lot better numbers.

Not bad for what it is; I could trade it and get money out of it.... but I have a great interest rate. Nothing out there that low, even if I wanted something else.

Hyundai comes close with their "in house" financing out to 60 months but I found out the "fix" on the santa cruz isn't a fix it just jams it into a gear when the trans fails vs going into neutral. Don't want to trade one thing with a possible trans issue for another with a trans issue..... then pay a bank more because shenanigans that I didn't create (credit score has gone up a good bit since I got the loan on the Ranger)

Depends on the market. If they mostly sell 4x4 then a 4x2 will get lower value. I plan to drive my ranger till the wheels fall off at this point.

 

[12Bravo20]

I traded in a paid for 2011 Harley Tri Glide on a 2020 Ranger XL STX. I had to pay sales tax on the $9,000 dollar difference. Sales tax was $740 here in Missouri. A year later I traded in the 2020 XL STX and a 2016 Jeep Cherokee on a new 2020 XLT FX4. The trade in value for both of those was real close to what I paid for the XLT FX4 and I paid around $70 in sales tax.

I had to give up riding motorcycles so that is why I traded the trike in for the 2WD XL STX. A year later I got to thinking - Why am I paying insurance and property taxes on two vehicles when I can only drive one at a time. So I traded the XL and Jeep in for the XLT FX4 which lowered my insurance and property taxes.

 

[ppfd]

You all have the personal property tax like here in WV?

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