So, you're underwater on your car loan. Is it really such a bad thing? If you're not thinking about trading in your vehicle, you may not think twice about having negative equity. But you should.

Should you keep your car and pay it off, or trade it in and use the equity as a down payment on your next vehicle? Both are viable options, and it ultimately depends on what you need and want out of your current car.

Trading in a car on a bad credit auto loan is something that you can absolutely do. One thing you have to be careful of, however, is trading in a car in which you have negative equity.

The most important step to take in the car buying process is to be as prepared as possible before you set foot in a dealership. This includes checking your credit score and reports, calculating a budget, and even rate shopping. But there’s lots of paperwork involved, too. If you plan on trading in your car, be prepared to bring extra documents.

Trading in a car can be a simple process, but there are a few things to keep in mind. The process generally follows the same steps, but how it all comes out in the end depends on equity.

In order to trade in your car, you must have the title ready and available for the dealership. Unless there’s a lienholder involved, dealers won’t accept a trade-in unless they can see the title with your name on it.

We’ve all heard the commercials: “Come on down, we’ll give you $2,500 for your trade-in – no matter the condition! That’s right! Push, pull, or drag your vehicle to our store and we guarantee…” If it sounds too good to be true, you’re right. These deals – sometimes known as push, pull, or drag events – are called minimum trade-in allowances, and they can cost you big time if you’re not careful.

You can sometimes trade in a vehicle if you’re behind on your loan payments – but it may depend on how far behind you are.

There's a lot to consider when you're ready for your next vehicle and have a car to trade in. How you prepare can affect how much money you’ll get for your trade-in, but looking at our trade-in dos and don’ts can help you out.

If you're thinking of buying a car while still in possession of a vehicle that has cash value, you can either sell that vehicle or trade it in to a dealership. Which is the better option? Trading in will probably save you a significant amount of time and effort.