diff --git a/backend/src/features/subscriptions/api/subscriptions.controller.ts b/backend/src/features/subscriptions/api/subscriptions.controller.ts
index 7d4e03e..719eba3 100644
--- a/backend/src/features/subscriptions/api/subscriptions.controller.ts
+++ b/backend/src/features/subscriptions/api/subscriptions.controller.ts
@@ -246,4 +246,65 @@ export class SubscriptionsController {
       });
     }
   }
+
+  /**
+   * POST /api/subscriptions/downgrade - Downgrade subscription with vehicle selection
+   */
+  async downgrade(
+    request: FastifyRequest<{
+      Body: {
+        targetTier: 'free' | 'pro';
+        vehicleIdsToKeep: string[];
+      };
+    }>,
+    reply: FastifyReply
+  ): Promise<void> {
+    try {
+      const userId = (request as any).user.sub;
+      const { targetTier, vehicleIdsToKeep } = request.body;
+
+      // Validate inputs
+      if (!targetTier || !vehicleIdsToKeep) {
+        reply.status(400).send({
+          error: 'Missing required fields',
+          message: 'targetTier and vehicleIdsToKeep are required',
+        });
+        return;
+      }
+
+      if (!['free', 'pro'].includes(targetTier)) {
+        reply.status(400).send({
+          error: 'Invalid tier',
+          message: 'targetTier must be "free" or "pro"',
+        });
+        return;
+      }
+
+      if (!Array.isArray(vehicleIdsToKeep)) {
+        reply.status(400).send({
+          error: 'Invalid vehicle selection',
+          message: 'vehicleIdsToKeep must be an array',
+        });
+        return;
+      }
+
+      // Downgrade subscription
+      const updatedSubscription = await this.service.downgradeSubscription(
+        userId,
+        targetTier,
+        vehicleIdsToKeep
+      );
+
+      reply.status(200).send(updatedSubscription);
+    } catch (error: any) {
+      logger.error('Failed to downgrade subscription', {
+        userId: (request as any).user?.sub,
+        error: error.message,
+      });
+      reply.status(500).send({
+        error: 'Failed to downgrade subscription',
+        message: error.message,
+      });
+    }
+  }
 }
diff --git a/backend/src/features/subscriptions/api/subscriptions.routes.ts b/backend/src/features/subscriptions/api/subscriptions.routes.ts
index 25e4789..cca8439 100644
--- a/backend/src/features/subscriptions/api/subscriptions.routes.ts
+++ b/backend/src/features/subscriptions/api/subscriptions.routes.ts
@@ -48,4 +48,10 @@ export const subscriptionsRoutes: FastifyPluginAsync = async (
     preHandler: [fastify.authenticate],
     handler: subscriptionsController.getInvoices.bind(subscriptionsController)
   });
+
+  // POST /api/subscriptions/downgrade - Downgrade subscription with vehicle selection
+  fastify.post('/subscriptions/downgrade', {
+    preHandler: [fastify.authenticate],
+    handler: subscriptionsController.downgrade.bind(subscriptionsController)
+  });
 };
diff --git a/backend/src/features/subscriptions/domain/subscriptions.service.ts b/backend/src/features/subscriptions/domain/subscriptions.service.ts
index 14f26e4..f422dd4 100644
--- a/backend/src/features/subscriptions/domain/subscriptions.service.ts
+++ b/backend/src/features/subscriptions/domain/subscriptions.service.ts
@@ -271,6 +271,95 @@ export class SubscriptionsService {
     }
   }
 
+  /**
+   * Downgrade subscription to a lower tier with vehicle selection
+   */
+  async downgradeSubscription(
+    userId: string,
+    targetTier: SubscriptionTier,
+    vehicleIdsToKeep: string[]
+  ): Promise<Subscription> {
+    try {
+      logger.info('Downgrading subscription', { userId, targetTier, vehicleCount: vehicleIdsToKeep.length });
+
+      // Get current subscription
+      const currentSubscription = await this.repository.findByUserId(userId);
+      if (!currentSubscription) {
+        throw new Error('No subscription found for user');
+      }
+
+      // Define tier limits
+      const tierLimits: Record<SubscriptionTier, number | null> = {
+        free: 2,
+        pro: 5,
+        enterprise: null, // unlimited
+      };
+
+      const targetLimit = tierLimits[targetTier];
+
+      // Validate vehicle selection count
+      if (targetLimit !== null && vehicleIdsToKeep.length > targetLimit) {
+        throw new Error(`Vehicle selection exceeds tier limit. ${targetTier} tier allows ${targetLimit} vehicles, but ${vehicleIdsToKeep.length} were selected.`);
+      }
+
+      // Cancel current Stripe subscription if exists (downgrading from paid tier)
+      if (currentSubscription.stripeSubscriptionId) {
+        await this.stripeClient.cancelSubscription(
+          currentSubscription.stripeSubscriptionId,
+          false // Cancel immediately, not at period end
+        );
+      }
+
+      // Clear previous vehicle selections
+      await this.repository.deleteVehicleSelectionsByUserId(userId);
+
+      // Save new vehicle selections
+      for (const vehicleId of vehicleIdsToKeep) {
+        await this.repository.createVehicleSelection({
+          userId,
+          vehicleId,
+        });
+      }
+
+      // Update subscription tier
+      const updateData: UpdateSubscriptionData = {
+        tier: targetTier,
+        status: 'active',
+        stripeSubscriptionId: undefined,
+        billingCycle: undefined,
+        cancelAtPeriodEnd: false,
+      };
+
+      const updatedSubscription = await this.repository.update(
+        currentSubscription.id,
+        updateData
+      );
+
+      if (!updatedSubscription) {
+        throw new Error('Failed to update subscription');
+      }
+
+      // Sync tier to user profile
+      await this.syncTierToUserProfile(userId, targetTier);
+
+      logger.info('Subscription downgraded', {
+        subscriptionId: updatedSubscription.id,
+        userId,
+        targetTier,
+        vehicleCount: vehicleIdsToKeep.length,
+      });
+
+      return updatedSubscription;
+    } catch (error: any) {
+      logger.error('Failed to downgrade subscription', {
+        userId,
+        targetTier,
+        error: error.message,
+      });
+      throw error;
+    }
+  }
+
   /**
    * Handle incoming Stripe webhook event
    */
diff --git a/backend/src/features/vehicles/domain/vehicles.service.ts b/backend/src/features/vehicles/domain/vehicles.service.ts
index 4ab2b6f..e4a7f74 100644
--- a/backend/src/features/vehicles/domain/vehicles.service.ts
+++ b/backend/src/features/vehicles/domain/vehicles.service.ts
@@ -203,23 +203,85 @@ export class VehiclesService {
 
   async getUserVehicles(userId: string): Promise<VehicleResponse[]> {
     const cacheKey = `${this.cachePrefix}:user:${userId}`;
-    
+
     // Check cache
     const cached = await cacheService.get<VehicleResponse[]>(cacheKey);
     if (cached) {
       logger.debug('Vehicle list cache hit', { userId });
       return cached;
     }
-    
+
     // Get from database
     const vehicles = await this.repository.findByUserId(userId);
     const response = vehicles.map((v: Vehicle) => this.toResponse(v));
-    
+
     // Cache result
     await cacheService.set(cacheKey, response, this.listCacheTTL);
-    
+
     return response;
   }
+
+  /**
+   * Get user vehicles with tier-gated status
+   * Returns vehicles with tierStatus: 'active' | 'locked'
+   */
+  async getUserVehiclesWithTierStatus(userId: string): Promise<Array<VehicleResponse & { tierStatus: 'active' | 'locked' }>> {
+    // Get user's subscription tier
+    const userProfile = await this.userProfileRepository.getByAuth0Sub(userId);
+    if (!userProfile) {
+      throw new Error('User profile not found');
+    }
+    const userTier = userProfile.subscriptionTier;
+
+    // Get all vehicles
+    const vehicles = await this.repository.findByUserId(userId);
+
+    // Define tier limits
+    const tierLimits: Record<SubscriptionTier, number | null> = {
+      free: 2,
+      pro: 5,
+      enterprise: null, // unlimited
+    };
+
+    const tierLimit = tierLimits[userTier];
+
+    // If tier has unlimited vehicles, all are active
+    if (tierLimit === null) {
+      return vehicles.map((v: Vehicle) => ({
+        ...this.toResponse(v),
+        tierStatus: 'active' as const,
+      }));
+    }
+
+    // If vehicle count is within tier limit, all are active
+    if (vehicles.length <= tierLimit) {
+      return vehicles.map((v: Vehicle) => ({
+        ...this.toResponse(v),
+        tierStatus: 'active' as const,
+      }));
+    }
+
+    // Vehicle count exceeds tier limit - check for tier_vehicle_selections
+    // Get vehicle selections from subscriptions repository
+    const { SubscriptionsRepository } = await import('../../subscriptions/data/subscriptions.repository');
+    const subscriptionsRepo = new SubscriptionsRepository(this.pool);
+    const selections = await subscriptionsRepo.findVehicleSelectionsByUserId(userId);
+    const selectedVehicleIds = new Set(selections.map(s => s.vehicleId));
+
+    // If no selections exist, return all as active (selections only exist after downgrade)
+    if (selections.length === 0) {
+      return vehicles.map((v: Vehicle) => ({
+        ...this.toResponse(v),
+        tierStatus: 'active' as const,
+      }));
+    }
+
+    // Mark vehicles as active or locked based on selections
+    return vehicles.map((v: Vehicle) => ({
+      ...this.toResponse(v),
+      tierStatus: selectedVehicleIds.has(v.id) ? ('active' as const) : ('locked' as const),
+    }));
+  }
   
   async getVehicle(id: string, userId: string): Promise<VehicleResponse> {
     const vehicle = await this.repository.findById(id);
diff --git a/backend/src/features/vehicles/domain/vehicles.types.ts b/backend/src/features/vehicles/domain/vehicles.types.ts
index 024d54c..e1380de 100644
--- a/backend/src/features/vehicles/domain/vehicles.types.ts
+++ b/backend/src/features/vehicles/domain/vehicles.types.ts
@@ -195,6 +195,11 @@ export interface VehicleParams {
   id: string;
 }
 
+// Vehicle with tier status (for tier-gated access)
+export interface VehicleWithTierStatus extends Vehicle {
+  tierStatus: 'active' | 'locked';
+}
+
 // TCO (Total Cost of Ownership) response
 export interface TCOResponse {
   vehicleId: string;
diff --git a/frontend/src/features/subscription/api/subscription.api.ts b/frontend/src/features/subscription/api/subscription.api.ts
index 35c7cc4..61df5ed 100644
--- a/frontend/src/features/subscription/api/subscription.api.ts
+++ b/frontend/src/features/subscription/api/subscription.api.ts
@@ -1,5 +1,5 @@
 import { apiClient } from '../../../core/api/client';
-import type { CheckoutRequest, PaymentMethodUpdateRequest } from '../types/subscription.types';
+import type { CheckoutRequest, PaymentMethodUpdateRequest, DowngradeRequest } from '../types/subscription.types';
 
 export const subscriptionApi = {
   getSubscription: () => apiClient.get('/subscriptions'),
@@ -8,4 +8,5 @@ export const subscriptionApi = {
   reactivate: () => apiClient.post('/subscriptions/reactivate'),
   updatePaymentMethod: (data: PaymentMethodUpdateRequest) => apiClient.put('/subscriptions/payment-method', data),
   getInvoices: () => apiClient.get('/subscriptions/invoices'),
+  downgrade: (data: DowngradeRequest) => apiClient.post('/subscriptions/downgrade', data),
 };
diff --git a/frontend/src/features/subscription/components/DowngradeFlow.tsx b/frontend/src/features/subscription/components/DowngradeFlow.tsx
new file mode 100644
index 0000000..15dc62f
--- /dev/null
+++ b/frontend/src/features/subscription/components/DowngradeFlow.tsx
@@ -0,0 +1,67 @@
+import { useState, useEffect } from 'react';
+import { useVehicles } from '../../vehicles/hooks/useVehicles';
+import { VehicleSelectionDialog } from './VehicleSelectionDialog';
+import type { SubscriptionTier } from '../types/subscription.types';
+
+interface DowngradeFlowProps {
+  targetTier: SubscriptionTier;
+  onComplete: (vehicleIdsToKeep: string[]) => void;
+  onCancel: () => void;
+}
+
+const TIER_LIMITS: Record<SubscriptionTier, number | null> = {
+  free: 2,
+  pro: 5,
+  enterprise: null, // unlimited
+};
+
+export const DowngradeFlow = ({
+  targetTier,
+  onComplete,
+  onCancel,
+}: DowngradeFlowProps) => {
+  const { data: vehicles } = useVehicles();
+  const [showVehicleSelection, setShowVehicleSelection] = useState(false);
+
+  useEffect(() => {
+    // Check if vehicle selection is needed
+    const targetLimit = TIER_LIMITS[targetTier];
+    const vehicleCount = vehicles?.length || 0;
+
+    if (targetLimit !== null && vehicleCount > targetLimit) {
+      // Vehicle count exceeds target tier limit - show selection dialog
+      setShowVehicleSelection(true);
+    } else {
+      // No selection needed - directly downgrade with all vehicles
+      const allVehicleIds = vehicles?.map((v: any) => v.id) || [];
+      onComplete(allVehicleIds);
+    }
+  }, [vehicles, targetTier, onComplete]);
+
+  const handleVehicleSelectionConfirm = (selectedVehicleIds: string[]) => {
+    setShowVehicleSelection(false);
+    onComplete(selectedVehicleIds);
+  };
+
+  const handleVehicleSelectionCancel = () => {
+    setShowVehicleSelection(false);
+    onCancel();
+  };
+
+  if (!showVehicleSelection) {
+    return null;
+  }
+
+  const targetLimit = TIER_LIMITS[targetTier];
+
+  return (
+    <VehicleSelectionDialog
+      open={showVehicleSelection}
+      onClose={handleVehicleSelectionCancel}
+      onConfirm={handleVehicleSelectionConfirm}
+      vehicles={vehicles || []}
+      maxSelections={targetLimit || 0}
+      targetTier={targetTier}
+    />
+  );
+};
diff --git a/frontend/src/features/subscription/components/VehicleSelectionDialog.tsx b/frontend/src/features/subscription/components/VehicleSelectionDialog.tsx
new file mode 100644
index 0000000..14ba3cf
--- /dev/null
+++ b/frontend/src/features/subscription/components/VehicleSelectionDialog.tsx
@@ -0,0 +1,135 @@
+import { useState, useEffect } from 'react';
+import {
+  Dialog,
+  DialogTitle,
+  DialogContent,
+  DialogActions,
+  Button,
+  FormGroup,
+  FormControlLabel,
+  Checkbox,
+  Typography,
+  Alert,
+  Box,
+} from '@mui/material';
+import type { SubscriptionTier } from '../types/subscription.types';
+
+interface Vehicle {
+  id: string;
+  make?: string;
+  model?: string;
+  year?: number;
+  nickname?: string;
+}
+
+interface VehicleSelectionDialogProps {
+  open: boolean;
+  onClose: () => void;
+  onConfirm: (selectedVehicleIds: string[]) => void;
+  vehicles: Vehicle[];
+  maxSelections: number;
+  targetTier: SubscriptionTier;
+}
+
+export const VehicleSelectionDialog = ({
+  open,
+  onClose,
+  onConfirm,
+  vehicles,
+  maxSelections,
+  targetTier,
+}: VehicleSelectionDialogProps) => {
+  const [selectedVehicleIds, setSelectedVehicleIds] = useState<string[]>([]);
+
+  // Pre-select first N vehicles when dialog opens
+  useEffect(() => {
+    if (open && vehicles.length > 0) {
+      const initialSelection = vehicles.slice(0, maxSelections).map((v) => v.id);
+      setSelectedVehicleIds(initialSelection);
+    }
+  }, [open, vehicles, maxSelections]);
+
+  const handleToggle = (vehicleId: string) => {
+    setSelectedVehicleIds((prev) => {
+      if (prev.includes(vehicleId)) {
+        return prev.filter((id) => id !== vehicleId);
+      } else {
+        // Only add if under the limit
+        if (prev.length < maxSelections) {
+          return [...prev, vehicleId];
+        }
+        return prev;
+      }
+    });
+  };
+
+  const handleConfirm = () => {
+    onConfirm(selectedVehicleIds);
+  };
+
+  const getVehicleLabel = (vehicle: Vehicle): string => {
+    if (vehicle.nickname) {
+      return vehicle.nickname;
+    }
+    const parts = [vehicle.year, vehicle.make, vehicle.model].filter(Boolean);
+    return parts.join(' ') || 'Unknown Vehicle';
+  };
+
+  const canConfirm = selectedVehicleIds.length > 0 && selectedVehicleIds.length <= maxSelections;
+
+  return (
+    <Dialog open={open} onClose={onClose} maxWidth="sm" fullWidth>
+      <DialogTitle>Select Vehicles to Keep</DialogTitle>
+      <DialogContent>
+        <Alert severity="warning" sx={{ mb: 2 }}>
+          You are downgrading to the {targetTier} tier, which allows {maxSelections} vehicle
+          {maxSelections > 1 ? 's' : ''}. Select which vehicles you want to keep active. Unselected
+          vehicles will be hidden but not deleted, and you can unlock them by upgrading later.
+        </Alert>
+
+        <Box sx={{ mb: 2 }}>
+          <Typography variant="body2" color="text.secondary">
+            Selected {selectedVehicleIds.length} of {maxSelections} allowed
+          </Typography>
+        </Box>
+
+        <FormGroup>
+          {vehicles.map((vehicle) => (
+            <FormControlLabel
+              key={vehicle.id}
+              control={
+                <Checkbox
+                  checked={selectedVehicleIds.includes(vehicle.id)}
+                  onChange={() => handleToggle(vehicle.id)}
+                  disabled={
+                    !selectedVehicleIds.includes(vehicle.id) &&
+                    selectedVehicleIds.length >= maxSelections
+                  }
+                />
+              }
+              label={getVehicleLabel(vehicle)}
+            />
+          ))}
+        </FormGroup>
+
+        {selectedVehicleIds.length === 0 && (
+          <Alert severity="error" sx={{ mt: 2 }}>
+            You must select at least one vehicle.
+          </Alert>
+        )}
+
+        {selectedVehicleIds.length > maxSelections && (
+          <Alert severity="error" sx={{ mt: 2 }}>
+            You can only select up to {maxSelections} vehicle{maxSelections > 1 ? 's' : ''}.
+          </Alert>
+        )}
+      </DialogContent>
+      <DialogActions>
+        <Button onClick={onClose}>Cancel</Button>
+        <Button onClick={handleConfirm} variant="contained" disabled={!canConfirm}>
+          Confirm Downgrade
+        </Button>
+      </DialogActions>
+    </Dialog>
+  );
+};
diff --git a/frontend/src/features/subscription/hooks/useSubscription.ts b/frontend/src/features/subscription/hooks/useSubscription.ts
index 943a500..225ed4a 100644
--- a/frontend/src/features/subscription/hooks/useSubscription.ts
+++ b/frontend/src/features/subscription/hooks/useSubscription.ts
@@ -74,3 +74,20 @@ export const useInvoices = () => {
     staleTime: 5 * 60 * 1000,
   });
 };
+
+export const useDowngrade = () => {
+  const queryClient = useQueryClient();
+  return useMutation({
+    mutationFn: subscriptionApi.downgrade,
+    onSuccess: () => {
+      queryClient.invalidateQueries({ queryKey: ['subscription'] });
+      queryClient.invalidateQueries({ queryKey: ['vehicles'] });
+      queryClient.invalidateQueries({ queryKey: ['user-profile'] });
+      toast.success('Subscription downgraded successfully');
+    },
+    onError: (error: unknown) => {
+      const err = error as { response?: { data?: { message?: string } } };
+      toast.error(err.response?.data?.message || 'Downgrade failed');
+    },
+  });
+};
diff --git a/frontend/src/features/subscription/pages/SubscriptionPage.tsx b/frontend/src/features/subscription/pages/SubscriptionPage.tsx
index 3e6242b..788d327 100644
--- a/frontend/src/features/subscription/pages/SubscriptionPage.tsx
+++ b/frontend/src/features/subscription/pages/SubscriptionPage.tsx
@@ -21,12 +21,14 @@ import { Card } from '../../../shared-minimal/components/Card';
 import { TierCard } from '../components/TierCard';
 import { PaymentMethodForm } from '../components/PaymentMethodForm';
 import { BillingHistory } from '../components/BillingHistory';
+import { DowngradeFlow } from '../components/DowngradeFlow';
 import {
   useSubscription,
   useCheckout,
   useCancelSubscription,
   useReactivateSubscription,
   useInvoices,
+  useDowngrade,
 } from '../hooks/useSubscription';
 import { PLANS } from '../constants/plans';
 import type { BillingCycle, SubscriptionTier } from '../types/subscription.types';
@@ -37,12 +39,15 @@ export const SubscriptionPage: React.FC = () => {
   const [billingCycle, setBillingCycle] = useState<BillingCycle>('monthly');
   const [selectedTier, setSelectedTier] = useState<SubscriptionTier | null>(null);
   const [showPaymentDialog, setShowPaymentDialog] = useState(false);
+  const [showDowngradeFlow, setShowDowngradeFlow] = useState(false);
+  const [downgradeTargetTier, setDowngradeTargetTier] = useState<SubscriptionTier | null>(null);
 
   const { data: subscriptionData, isLoading: isLoadingSubscription } = useSubscription();
   const { data: invoicesData, isLoading: isLoadingInvoices } = useInvoices();
   const checkoutMutation = useCheckout();
   const cancelMutation = useCancelSubscription();
   const reactivateMutation = useReactivateSubscription();
+  const downgradeMutation = useDowngrade();
 
   const subscription = subscriptionData?.data;
   const invoices = invoicesData?.data || [];
@@ -53,9 +58,50 @@ export const SubscriptionPage: React.FC = () => {
     }
   };
 
+  const getTierRank = (tier: SubscriptionTier): number => {
+    const ranks = { free: 0, pro: 1, enterprise: 2 };
+    return ranks[tier];
+  };
+
   const handleUpgradeClick = (tier: SubscriptionTier) => {
-    setSelectedTier(tier);
-    setShowPaymentDialog(true);
+    const currentTier = subscription?.tier || 'free';
+    const isDowngrade = getTierRank(tier) < getTierRank(currentTier);
+
+    if (isDowngrade) {
+      // Trigger downgrade flow
+      setDowngradeTargetTier(tier);
+      setShowDowngradeFlow(true);
+    } else {
+      // Trigger upgrade flow (show payment dialog)
+      setSelectedTier(tier);
+      setShowPaymentDialog(true);
+    }
+  };
+
+  const handleDowngradeComplete = (vehicleIdsToKeep: string[]) => {
+    if (!downgradeTargetTier) return;
+
+    downgradeMutation.mutate(
+      {
+        targetTier: downgradeTargetTier,
+        vehicleIdsToKeep,
+      },
+      {
+        onSuccess: () => {
+          setShowDowngradeFlow(false);
+          setDowngradeTargetTier(null);
+        },
+        onError: () => {
+          setShowDowngradeFlow(false);
+          setDowngradeTargetTier(null);
+        },
+      }
+    );
+  };
+
+  const handleDowngradeCancel = () => {
+    setShowDowngradeFlow(false);
+    setDowngradeTargetTier(null);
   };
 
   const handlePaymentSubmit = (paymentMethodId: string) => {
@@ -244,6 +290,14 @@ export const SubscriptionPage: React.FC = () => {
           </Button>
         </DialogActions>
       </Dialog>
+
+      {showDowngradeFlow && downgradeTargetTier && (
+        <DowngradeFlow
+          targetTier={downgradeTargetTier}
+          onComplete={handleDowngradeComplete}
+          onCancel={handleDowngradeCancel}
+        />
+      )}
     </Box>
   );
 };
diff --git a/frontend/src/features/subscription/types/subscription.types.ts b/frontend/src/features/subscription/types/subscription.types.ts
index a7d9af3..9f6398d 100644
--- a/frontend/src/features/subscription/types/subscription.types.ts
+++ b/frontend/src/features/subscription/types/subscription.types.ts
@@ -36,3 +36,8 @@ export interface CheckoutRequest {
 export interface PaymentMethodUpdateRequest {
   paymentMethodId: string;
 }
+
+export interface DowngradeRequest {
+  targetTier: SubscriptionTier;
+  vehicleIdsToKeep: string[];
+}