A theoretical car purchase question

[Deleted]

I have a 4 year old Subaru WRX that I absolutely adore, but gas for that sucker is expensive. On a whim, I went looking for inventories at dealerships in the area because I also had an Outback in college that I kind of miss. I'm definitely in the Subaru for life camp.

Anyway, I found a 4 year old Outback for sale that is significantly less expensive than what the projected trade in on my car would get me. So now I'm curious. What happens if you want to "trade down" a car?

Bear in mind, I'm not really going to do this. I do love my car, I just get down on him when I see the gas prices around here.

[makingithappen]

Do you owe anything on your car? If you have trade equity, then you get the money. Otherwise, your car is paid off first

[Deleted]

Sept 25, 2012 14:32:50 GMT -5 makingithappen said:

Do you owe anything on your car? If you have trade equity, then you get the money. Otherwise, your car is paid off first

Nope, car is completely paid off. I knew the extra would go towards the loan in the case it wasn't. But I didn't know what happened when I had the title.

[makingithappen]

Most people would get the difference from their car and the new one, but I don't guess you are actually required to completely pay for the new car. Depending on your interest rate, you could even finance the new car and get the entire amount for yours back.

ETA: I'm not sure if this is every state, but here you only pay taxes on the amount of the vehicle minus your trade. Applying your trade value to the new car could get you out of there without paying any sales tax.

[thegooser]

I did it. No regrets!