I currently own a 2002 WRX with 50k miles and $8300 left on my loan. I figure my car is worth $9500 or so for trade-in value. Can someone explain to me how the tradein with loan lean process works? I'm looking at getting an STI or a late model WRX which range from $20k to $28k'ish.

Does it work like so?
They pay off the loan with the $9500, leaving me with $1000 or so not including my down payment to use againest the new ride?

 

that is exactly how it works but dont be suprised when they offer you less than your payoff for the car. once you do agree on a price for your trade they can apply your equity or inequity to the new loan or you can take it back meaning if you owe 8300 and they give you 9500 you can take the 1200 back and put it in your pocket if you wanted to. also you should agree on a price for the car you are buying 1st then work the trade. meaning if you are looking at a new sti with 3k in markup they can show you an artifically high number on your trade when all they are really doing is giving you a discount on the car and and a lower number for your car.

 

Try selling it first.

 

I would try selling the car private party first. You will probably get more. That way, you walk into the new car without an outstanding loan, and some cash to put as a down.