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A buddy and I were discussing a scenario that involved trading a car in the other day, and neither one of us were sure how this would work.
What happens when you trade in a car that you owe slightly more than the trade-in value but you trade it in for a car that is worth less than the trade-in value?
example: Say you owe $20k on a car that has a trade-in value of $18k and you trade it in for a car that is worth $16k. Do you end up paying the difference between what you owe and what the new car is worth (20k-16k = 4k) because the value of the car is covered in the trade-in value?
I've never been involved in any type of trade-in, so i hardly feel like an expert.
Trade-in scenario
