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?

“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.”
Eric Schad
Answered on May 05, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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