Question

If you don’t have cash to use as a down payment , you could use your existing car as a trade in. Explain how this can save money.

Answer 1

You may decide to trade the car in for a less expensive one at the dealer. While this may substantially lower your monthly payment, you will still have to pay back what you owed on your old car. Often, the dealer will roll any excess that you owe on the loan into your next car loan.