For those of you that have traded in a car that still was being financed; how did the dealership usually go about handling that?

Edit: I hope my question makes sense.

 

The dealership will pay off your existing loan and add that amount to your new loan, iirc.

 

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.

 

Is there a good place to find out the trade-in value for a car?

 

edmunds.com go to used cars> research and price
also kbb.com

edit:
your real trade in should be somewhere between trade in and private party. If you push it, you can sometimes do even better than that. these numbers are averages usually.

 

Upside down trade is when you owe more than the wholesale value of your car. Look for wholesale values before you go to trade your car in, and then decide. You may be better off trying to sell your car privately.

 

There's that, too.

My post should have said they add the payoff to your new loan then subtract what the cars worth.

 

Nadaguides.com usually has higher trade in value amounts than KBB or Edmunds. I'd print out what it says for your car and take that to the dealer to use as a bargaining tool if they low ball you.

 

I knew what you meant just wanted to elaborate for those who didn't know

 

The dealer is going to rape you on a trade in. It's best to sell the car privately, make sure you get enough back to pay off the original loan, and end the bank note immediately.

Whatever money you get over the existing loan can be used towards the new car.

This is identical to what Spanky said, but selling privately will yield higher returns.