Here's a simplified example:
Trade-in Value: $15,000
New Vehicle Price: $12,000
In this case, the dealership would apply the $15,000 trade-in value towards the $12,000 purchase price, leaving a balance of $3,000. You would need to pay this remaining amount in cash or through financing.
Some dealerships may also offer a "trade-in credit" that exceeds the trade-in value, effectively giving you a discount on the new vehicle. However, this is typically done as a promotional offer and may have certain conditions or restrictions.
To ensure you get the best possible deal, it's advisable to research and compare prices from multiple dealerships before finalizing the trade-in and purchase. You can also negotiate the terms of the trade-in, such as the trade-in value and any potential trade-in credits or incentives.