How exactly does trading a car in work?

Not that im trading in my TSX, but im curious

lets say i wanted to trade my tsx in for lets say, a 350z.

I financed my TSX, and i guess i have(well my mom ) about 15-18k to pay off after 1 year? i think we put 5k or 8k down, and it was 28....


But my car has mods on it, like intake/exhaust , something that i really would not want to return to stock mode, and assuming i dont want to deal with private sellings, and just trade the car in, and lose some money....

how exactly would the process work?

 

The dealer that you traded your car in on would basically be paying off Honda, so you would only be getting money on money you paid. Say you paid 8k, so they might give you 5k for your trade and take it off the price of the 350Z for example. I think it works something like that.

Oh, and your debadging will cost you some of that money you get back for the trade. In general, people hate debadged cars. The tint will usually bring up the value if it's tastefully done. If your exhaust sounds obnoxious and is a big ugly pipe, the car will be worth less. The new rims should add some value but not nearly what you paid for them. The lip spoiler is a toss up with regards to value.

 

Let's say after 1 year you owe $15,000 on the TSX, and it's worth $20,000. Let's say the cost of the Z is $25,000. Follow the math:

$25,000 cost of Z
+$15,000 Loan balance for TSX due to Honda
________
$40,000 you owe for the 2 cars
- $20,000 value of the TSX
________
$20,000 amount left to finance

Hopefully that makes sense. Your payments on the Z would be based on that $20,000, unless you have a down payment that reduces the $20,000.
If you see yourself switching very often, look into leasing rather than buying. Consider yourself luck if the TSX is actually worth more than you owe after only 1 year. Typically that's not the case.

 

Basically, the dealer will work the number usuing 4 squares:

http://www.edmunds.com/advice/financ...7/article.html

Your trade in will have to be paid off, so that will affect the trade in cash amount...

 

Thats in a perfect world though, dealer will want to give you 17k for your 20k car and then try and sell it for 23k. In the end, unless you can't sell the car outright( where u will most likely get 20k), you might end up losing money on the car you have to get the car you want at the dealer.

 

i c, thanks guys!

 

How about if you were negative? Does the following apply....?

$19,000 cost of Z
+$24,000 Loan balance for TSX due to Honda
________
$43,000 you owe for the 2 cars
- $19,000 value of the TSX
________
$24,000 amount left to finance?


Sorry to revive, may be going through similar situation.

Thanks

 

Sort of worse than that actually depending on the state you live in ...

19000 for the Z
+ Taxes and Title
-------------------
Sale price of the Z
+ Negative Equity
------------------
Amount you finance

Now, in some states (not sure of which ones as I've never actually seen it myself) you only pay taxes on the difference ... So if the Z were 19k and you had a trade worth 12k you'd only pay taxes on 7k. Like I said, people claim this tax rule exists and I've never seen it. *shrug*

 

Ok, good to know, thanks!