ORIGINAL: carpetride

If you owe 5500 and the dealer gives you 5500 trade allowance than it's a wash...If you owe 5500 and the dealer gives you 7500 trade in allowance, that 2000 equity is applied to the new bike as a 2000 down payment...if you owe 5500 and the dealer only gives you 4000 trade in allowance, you are upside down and that 1500 difference is added to the new loan....the dealer always pays off the old loan to get title of your trade in so they can sell it....otherwise you would get 2 payment notices from the bank.. one for each loan...sometimes the dealer is "late" in paying off the loan and you may get a past due notice on your old loan...the old loan is your responsibility until it's payed.
another thing to consider: If you trade in your bike and say you get 7500, that trade in amount will be subtracted from the new bike and that difference will be taxed. So say your buying a 15000 bike

ex. 15000-7500 trade= loan amount of 7500 plus (7500 times tax rate)

if you sell your bike youself for say 8000, you get taxed on entire 15000

15000 plus (15000 times tax rate)- 8000 down payment= loan amount

so make sure you sell your bike for more than what the trade in value plus the tax on that value would be

this concludes the lesson