Keep three numbers separate
Let’s give each number its own job. Your down payment is cash toward the next car. Trade equity is the trade value minus the old loan’s payoff—not the whole trade allowance. If that difference is positive, it reduces what you need to finance.
If it is a shortfall and you roll it into the next loan, it can increase the new balance instead.
Try a synthetic example
Suppose a trade is valued at $12,000 but its payoff is $15,000. The $3,000 shortfall does not disappear when a dealer offers to handle the old loan. Compare paying it separately, waiting, or financing it; if financed, it can also accrue interest. These figures are made up, not an appraisal.
Keep cash flexibility in the comparison
Try two synthetic down payments while keeping the same vehicle and term. More cash down reduces the balance that accrues interest, but it also leaves less cash available outside the purchase.
A real shopper should consider emergency needs and other obligations; OffLot has no information about those obligations and does not prescribe a personal down-payment amount. A percentage rule alone is not a complete affordability assessment.
For the negative-equity example, compare waiting, paying the shortfall separately or carrying it into a new loan. None makes the old debt vanish. In OffLot, negative equity already increases the financed principal; adding it again to total payments would double-count it.
The displayed total payments plus down excludes future insurance, fuel and maintenance and is not a complete ownership-cost forecast.