If you still owe money on your vehicle and are looking to trade it in, the current loan will have to be paid off in full. The reason for this is that the dealer will need to obtain the title to the vehicle in order to resell it after it is traded in. The way that a trade-in works with a payoff is you take the trade-in value, subtract your current payoff and you get your equity amount that can be applied towards the new vehicle. If owe more on the vehicle than it’s worth, you will be in a negative equity position, and that amount will be added towards the new loan. If you owe less than the vehicle is worth, you can either get a check back for that amount or simply use that money as the down payment for the new vehicle. Don’t fall for the “We’ll pay off your vehicle no matter how much you owe.” line. The money you owe doesn’t simply go away.

The direct answer is yes, however it’s a real bad idea. When you lease a vehicle about 99% of the time you are in a negative equity position in your vehicle when you go to trade it in. When you try and turn in the vehicle early there are a couple ways that can play out.

The first option is trading in the vehicle. How this works it the dealership will have to pay off the vehicle in order to receive the title. Your payoff will entail your current lease end buy out plus your remaining payments. 9 out of 10 times your buyout will be more then what your trade-in vehicle is worth. Leases are structured to be finished out.

The second option would be to turn it in to the dealership where they don’t keep the vehicle and turn it back into the manufacturer. In this case you are always upside down by your remaining payments. When you turn a vehicle back into the manufacturer you can walk away from the car, if you still have payments remaining when you turn the vehicle in, those payments are still owed to the bank. You will always be upside down in your car by your payments. Don’t fall for the “We’ll take care of those last few payments for you.” line from your dealer. The ONLY way this will happen is if there is a true early buyout program available from the manufacturer where they will waive your last payments. If there isn’t, they are simply taking those last payments and rolling them into your new loan.

A dealer demo is a brand new vehicle that has been driven by the dealership. Generally the vehicle will have anywhere between 3,000-6,000 miles on it. It is still considered a brand new car since it has never been titled. If you are purchasing a Demo vehicle you can expect an additional discount of $0.20-$0.30 per mile vs a brand new car. Since it is still a brand new vehicle you will be the first owner of the vehicle and it will also still qualify for all of the manufacturer incentives. Your warranty also starts from the time you take delivery of the vehicle.

This tends to be a loaded question. Most people don’t realize this but you can get the same deal on an order as you can on an in stock vehicle. It all comes down to time and inventory. If the dealership has the car you want, you can negotiate a great price and take the car home the same day. If you are very specific on the model and options you are looking for, you may end up having to order the vehicle. Usually it will take 6-8 weeks and you can still negotiate the price just like the car was on the lot. Since the vehicle is already sold before it gets to the lot, most dealers will match any deal they can do on an in stock vehicle.