Tips on Buying Cars: Trading Down, 2009 jaguar xf, negative balance

Question
I have a 2009 Jaguar XF Supercharged that was purchased new. It currently has about 15k miles. When purchased, we put about 45% down and I have been very agressive in making payments so we are not upside down on the vehicle. My plan was to have the car paid off by the end of the year.

Sounds great huh? Well my wife, who actually drives the Jag daily doesnt like the car. I want to trade down to a Honda Accord for her. That would be a car that she is more comfortable driving.

What could I expect (process-wise) in trading down the Jag? I want to get rid of it but am hesitant..

Please give me your best advice..


JC

Answer
Jeff,

Thanks for your question.  First you need to understand that you will take a depreciation hit on the vehicle.  While you may not be in negative equity, you still will have lost a considerable value in the vehicle.

As far as process wise.  It's pretty simple.  You will take the vehicle into a dealership and have it appraised.  The Jag should be considerably less than the Accord that you are looking at buying.  In this respect you will have what we call a "negative trade difference" meaning the value of your trade is more than the sales price of the vehicle you are purchasing.  Then you will add Tax, Title, and License fees, as well as your payoff to that amount.  Since you started with a negative amount, that value will be added to your negative amount.  If that amount turns into a positive amount after all of that is added back in, then you will either have to finance that balance, or you will have to pay it in full.  If that amount is still a negative amount, then upon titling the vehicle and completing the registration process (usually about 2 to 3 weeks) the dealer will cut you a check for the remainder of that negative balance.  This will all be spelled out on your purchase agreement so you will have documentation as to how much the dealership owes you, and that amount can not change.  

Other than that, the process is the same as when you purchased the Jag.

Hope this answers your question.

Thanks - JB