I'm reading several misconceptions here (which I think are just lost-in-translation incidents). Your interest rate and length of loan on your current Mustang fail to matter in trading in the car. What matters is the book value of the car on trade in versus the principal balance of the loan. What do you owe, and what is it worth? If you had 25% interest, it wouldn't matter on trading in the car because there are no penalties on simply interest loans (which is what you have).
The confusing part is what you wrote: the 19,000 and 26,000 thing. That doesn't compute on a 6% loan for 60 months and a 350 payment. Regardless, it isn't my business. To know what your car is worth, take a look at NADA.com to book it. Is trade in value higher than what you owe? Start there on deciding on a GT.
Just so you know, 6% is not a great interest rate. Rates vary based on credit, but dealers are allowed to sell you any loan you accept. For instance, you might qualify for a 3% loan yet agreed to a 6% loan. Guess who pockets income off that? The dealer. That'll really cost you. Call a credit union or bank and investigate what sort of rate you qualify for (based on several factors like income, debt, length of time on job, credit history, etc).
If you have any questions OP, put them out there.
To pay off your current loan it makes no difference what the interest is. You only pay the principal that is left.. Not what the entire loan amount would be with interest as if you kept it the entire length of the loan. Your statement "with interest it goes up to 26000” is incorrect..that only applies to the amount it would cost if you kept paying the loan over time. Call your loan company. They will tell you a payoff amount. That is the amount you can pay off the loan for usually 30 days. You want any tradein offered to be over that amount. The pay off should be somewhere under 19000 if that was the original purchase amount and you've been making payments for awhile.
You guys are absolutely right and I mis-stated a couple of the aspects of the loan. Yes, they would pay off his loan principle on the trade so he wouldnt take the full interest hit on a trade.
Still though, its likely the dealer isnt looking to do him any favors and rolling negative equity into the new loan is just not a good idea.
2011 Mustang GT M6 3.31s
Matt HONEYCUTT Tune, Lethal Off-Road X, GT500 axlebacks, J&M LCAs, UPR UCA, Whiteline LCA relocation brackets, Eibach Pro-Kit Springs, Koni STR.T shocks/struts, GT500 strut mounts, SR Strut Tower Brace
Best 1/4 E/T (05/18/14 MIR - no tune, X-pipe, or UCA): 12.920 @ 109.40 mph (2.059 60ft)