Should you trade in your vehicle or refinance it? That question is best answered by first asking what your intentions and goals are in the first place. What are you hoping to get out of this whole transaction, to begin with? There are some people who undoubtedly would do better if they simply traded it in because it is easier to do, but they always have to fear that they are not getting top dollar for the trade-in. Dealerships count on paying less than top dollar for trade-ins, and you need to be aware of that fact.

Refinancing may or may not be the answer as well. Yes, you can perhaps get a lower interest rate or even a longer loan term (thus reducing the monthly payment), but you may have a lot of trouble getting a loan like this if you are already underwater on the vehicle. Weigh your options carefully.

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