QCan I Use My Trade-in As A Down Payment?
AYes, you can. If there is a lien on the trade-in vehicle from a previous loan, that loan will have to be paid off before clear title can be passed on to the dealer you are trading your vehicle into. If you owe more for your old loan than your trade-in vehicle is worth to the used car dealer (referred to as Ónegative EquityÔ or being Óupside downÔ), you may be required to pay these additional cost in your down payment or by increasing your new loan amount to cover this added expense. Not all lenders will finance negative equity in the new car loan however.