I owe $10,000 on my existing car loan. I currently have enough to pay off my loan and still have enough to put down $5000 on a new car. My question is this, is it better to pay off the loan first and then trade it in which would mean waiting for the title and adding more miles to my current vehicle or would it be better to trade it in, transfer the $10,000 to the new loan and put down the whole $15000 on the new car?
Paying off the loan makes the purchase of the new car easier to negotiate.
If you don't pay if off before buying the new car you will be juggling the price of the new car, the price for the trade in, and the terms of the new loan. You will not have leverage in the negotiation becasue they know you have to trade in the old car becasue you might not qualify for the loan you want if you have two cars and two loans.
Talk to your bank, explain that you will pay off the old loan, then buy a new car and have $5K available for a down payment on a new car. They can determine what loan you will qualify for if you get a loan from them after paying off the old loan.
Pay off the old loan and get a clean title. And get a written commitment from your bank.
Then go to a car dealer or two and get an estimate, make sure it is good for a week or two. Many dealers will do this.
Now go to the place where you want to buy the car. You have an offer from your bank so you know what you can afford. Now negotiate the best deal you can. Don't trade in your car there or get the loan there unless they can beat the price and loan terms from the other places.
After you buy the car then go back to the place that offered the most money for a trade in, and sell them the old car. Take the money from the sale and make a big lump sum payment on the car loan.
Trying to do this all at a single dealership has too many moving parts to know if you are getting a good deal. They can play with two prices, the length of the loan and the interest rate to confuse you.