Some car dealers advertise that when you trade in one vehicle to buy another, they will pay off the balance of your loan – no matter how much you owe. But some people owe more on their car than the car is worth and for them, the dealer’s promises to pay off their entire loan may be misleading.
People with negative equity should pay special attention to vehicle trade-in offers because the ads may not be true. Dealers may include the negative equity in consumers’ new car loan. That would increase their monthly payments by adding principal and interest. What are your thoughts on trading in a car?