“If you plan on trading in a car that you have negative equity in, you are still going to owe the difference between what the dealer offers you for the car and the amount that is left on the loan. While you can pay that difference in cash or roll it into the next car loan, it might be better to reduce your negative equity before signing anything.
You can reduce your negative equity by paying extra towards the loan; refinancing the car loan could also help. You would also be better off selling your car privately, because you can typically get more for it than most dealers will be willing to offer for trade-in value. “