<prompt> Human: I purchased a new car in 2014 and have about 11,500 left to pay on it. Recently, I have been considering moving from a hatch to a small SUV. KBB says that the value of my car for trade-in would be 9500 and to sell privately would be right at about that 11,500. Ive never traded in a car before and am wondering, if I trade in my car for the 9500, I still owe the 11,500 on the credit line I took out, is that correct? So I would probably need to put that 9500 toward the debt and pay off the 2000 to close that debt? Im figuring, since I dont really have the extra cash to pay off that remaining 2000 and put a down payment on the new vehicle, I should probably make do with what I have for now. Is this sound logic in this situation?Thanks  <response>: Yes. You are upside down. You owe more than your car is worth. If you trade in the 2000 will roll into your next loan. The upside to trading in is you wont pay taxes on 9500 of your next purchase. So that will save you around 800 depending on the state you live in. 