Rampat
Ram Guru
You are 100% correct.I don’t see how any of that matters. There is sticker on the old truck, how much they give you for it on the trade, sticker on the new truck, and how much they actually sell it to you for (before trade-in).
Your payoff status on the old truck is irrelevant.
Simple math: (using round numbers)
Let’s say the original Limited cost him $60k out the door with taxes and everything.
Dealer gives him $45k on trade.
New Limited costs him $60k again
No matter how you paid for the first truck, whether you paid cash or still owe $50k it is still a net loss of $15k depreciation. (Of course there’s tax savings, interest costs, and a few other things that play a minor part one way or the other). But no matter how you pay for something the depreciation gets you.