Originally Posted by
XScarAudio
Basically, if you owe 10,000 on a car that is worth 12,000, they pay off 10,000 worth of loan, and then you have 2000 positive equity towards the new car. This is the same as having a down payment, and in turn reduces your loan amount.
If you have negative equity, then they charge that to the new loan so you owe MORE than the original price.
There's that, too.
My post should have said they add the payoff to your new loan then subtract what the cars worth.
