V1Rotate

This one has me scratching my head... you can't possibly be serious. If you're worried about the "fancy features" breaking down the road sometime (which seems ridiculous in itself, but obviously to each their own) then why don't you just put aside the money you're most certainly about to donate to trade down and just fix the stuff if it ever breaks? In the meantime, enjoy a nice truck and go home and peel the little protective stickers off of all the plastic dials/faces/etc you most certainly left on things over the years for fear of them not looking perfect 15 years later!

For what it's worth, you can have my 07 XLT in exchange for your Lariat, even stevens!

MrNiceGuy22

I can assure you I don't keep plastic protectors on my stuff.

redranger04g

His point was that it makes absolutely zero sense both financially and practically to trade down to an XLT. At best you will break even and have an XLT. Now you have "less to go wrong". Is that what you want, downgrade to an XLT, but gain nothing financially?

speeddemon0712

Maybe you'd get a tax credit? I have no idea.

Like someone else mentioned, why not just keep your nice Lariat and put some money aside in the off chance something does break outside of warranty? You have a while before your warranty runs out. If you put just $100/month aside for repairs, you'd have over $6000 after 5 years. I can guarantee you that will cover any repair needed to a part your Lariat has that the XLT doesn't.

Just enjoy the truck and don't worry so much!

MrNiceGuy22

Explain how I will break even? Just trying to understand the logic.

Features aside, I'm not upside down on this truck, I don't want to get hosed on trading the vehicle, I'm thinking more along the lines of I put down Y and financed X for this lariat, don't need all of the tech features, maybe I can save around $10k+ in the long run by looking for a used XLT.

Will the taxes I paid on this Lariat go towards the purchase of a much lower priced vehicle, and how will that work? I'm not trading up, but if I would, I would only be taxed on the difference between the two vehicles since I already paid taxes on this truck. So If I trade down, do I get a credit that could then be used towards the down payment of the cheaper truck? I know the government is not that stupid, just wanted opinions on the move.

speeddemon0712

No matter what you do, you will not come out ahead financially. Say you put 50% down on a $50k Lariat, then you'd owe $25k. Technically you're not upside down, so you're good there. But if you immediately traded it in for an XLT, and the dealership only gave you $40k for the truck, then you'd lose $10k. Yes the dealership still gave you $15k more than you owed, but you still lost $10k.

These are just numbers for easy math, but there's just no way you come out ahead here. Maybe cheaper in the long run, but not ahead.

redranger04g

I'll take the above example and add some more detail...

Say you put $25k down on a $50k lariat plus title/taxes so lets call it $55k. You have now financed $30k and spent $25k.

So you want to use the tax breaks (pay no taxes) by trading in your truck for a used XLT. So, you have to trade it in at a dealer who won't give you as much as selling it privately.

Lets say you trade in the lariat at a dealer and get $40k (very generous) and buy a used XLT for $35k (again, generously low price) and pay zero title/taxes. You made $5k on this deal.

You now have an XLT worth no more than $30k and now you owe $25k (assuming you put the extra $5k towards your loan). Lets look at how that compares to your current situation...

Don't downgrade
Spent $25k
Financed $30k
Own a $40k truck

Downgrade
Spent $25k
Financed $25k
Own a $30k truck

Look, these are all very rough numbers, but the point is, you may see a slight decrease in payments and net ~5k in cash, but you are going to lose more in assets than the cash you gain.

smcox1

Sounds to me like someone bought something they can't afford and now trying to figure out how to get out from under it.

marshallr

It doesn't cost anything to ask. Lots of people trade down, it won't be anything new for a dealer to deal with. Most of the time people find they bought more truck/vehicle than they can afford. They trade down to reduce their monthly payments or at times get equity back to pay off other bills and then buy an older less expensive vehicle.

Yes, you'll lose money, but for a lot of people taking the loss now is better than struggling with a payment they can't comfortably make. If you can easily afford the Lariat then keep it. If it is putting you in a strain financially let it go, take the loss and start over.

atwowheelguy

You didn't list your state of residence. In Georgia, it's called a Title Ad Valorem Tax fee. It's paid every time a title application is made for a new vehicle or a title transfer application is made for a used vehicle. It makes no difference if it is purchased from a dealer or from an individual. It's 7% paid every time the vehicle changes hands and requires a new title. The value of the trade-in vehicle is deducted from the purchase price before the tax is calculated. If you were in Georgia, and your trade-in vehicle was more valuable than the vehicle purchased, there would be no tax on the transaction. However, you would not get any rebate of the tax already paid on your trade-in vehicle when it was purchased. That money is long gone forever.

Look it up in Kelly Blue Book and see the difference in Retail and Trade-In value of your Lariat. That's what you will give up to the dealer by trading it in instead of selling it. See if that is more than what the tax will be on the vehicle you plan to buy. If so, sell it and buy the XLT and pay the tax on that. It would still be less than what you lose to the dealer by trading. If the trade-in loss is not more than the tax would be on purchasing the XLT, trade it and there will be no additional tax to pay.

This seems to be a cautionary tale of "new truck fever".