eli5 Trading in a vehicle with EQUAL trade in amount to payoff amount

Question

Say a dealership offers a trade in value equal to the amount owed on a vehicle. The vehicle you want to purchase on the trade in is of LESS value than the trade in/pay off amount in order to have a vehicle with a lower monthly payment. How would this work between the loans, what would the new loan include?

In: Mathematics

Answer 1

You pay off vehicle one with the money you get for trading it in, and get a new loan for vehicle two. You treat them as two separate transactions, even if they might be connected.