Trading in a car that you sill owe money on.
Never do it… What often happens is the dealer does not pay off the car on time, they could care less about your credit. They can get away often time with this because legally the car still belongs to you. Until the dealer pays off the money you owe, the car is still your responsibility. You have to make sure that the bank get the payments on time. Often many people have the issue of buying a new car and later being charged with late fees from the bank, on the car they traded in. If you still want to trade in your car, make the dealer put it in writing that the dealer will pay off the car in 10 days. If the dealer gives you a hard time or refuses, do not make the deal.
Do not wait until you car dies before buying a new car
If you car is no good and dying, you are going to be in a rush. You will buy any car, and sign any contract. You can be easily forced by the dealer to make quick decisions. Never let the dealer know that you are in desperate need of a new car. On average it should take you about 3 months to shop around, decide, negotiate, and buy a car,
A bad idea is to put all your money into fixing up a dying car, use that money instead to help you buy a new car. Once the problems start with the car, you’ll be spending a lot of time and money fixing it.