What's the catch on an early loan termination policy?

A car dealer in my town is running a special called an "early loan termination policy" that promises to pay for my current car loan, even if I'm upside-down, if I finance a car from them. It sounds too good to be true. What's the catch?

Answer provided by
Eric Schad
Answered on May 05, 2021
“The dealer will pay off your loan for certain. But the amount you still owe will just be rolled over into the loan for the new car.
However, if you can get a lower interest rate on the new loan, it might not be that bad of a deal. Ask about their financing and seek pre-approval to see how much APR they’re going to charge.”

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