Don’t trade in a car you still owe money on. Not only will you probably be upside-down on your new loan, but there have been instances where dealers don’t pay off your trade-in like they said they would. Guess what? You are still responsible for the trade-in car’s loan and the new car’s loan. If you decide to trade in a vehicle you are still making payments on, insist that the dealer put it in writing that they’ll pay off your trade-in car loan in 10 days, or no deal.