how does this all work?
To answer your question.
The two major factors are how much your jeep is worth and the cost of the other jeep.
You can usually get more for the jeep if it is stock or close to stock. This raises how much your jeep is worth. You can either sale the jeep to a private buyer or sell it to a dealer. Dealers make their money from buying wholesale and selling at retail. Usually you get more money from a private buyer because you cut out the middle man (dealer) and his profits. The drawback is the hassel of finding a buyer and going without a vehicle till you get a new one.
The cost of a "new" one is up to the deal you make with the owner, either private or dealer. The key is to know the value of the exact jeep you want or at least what it is worth to you.
Dealers will often try to confuse you or make a deal seem better by just talking about the difference or the amount of a possible payment. Remember the value of your jeep and the value of the new one are two SEPERATE things.
If you go to a dealer and trade here is what happens. They offer a price for your jeep, the principle of the loan you have has to be paid. (Find out the exact payoff for you loan.) If the jeep is worth more than you owe then the remainder is put toward the purchase of the new jeep. You pay the price of the jeep, taxes, tags, and all kinds of fees. At this point you can just pay the cash for the difference or finance what you do not have.
The loan you take out is another SEPERATE deal. The three things that determines your payment are: the amount you borrow, the interest rate, and length of term. When a person borrows money it is a case of the have-nots borrowing from the haves. The lender is giving money in your name with the promise you will pay back the principle with interests. (This is how the haves make money)
Have now and pay later is a slippery slope my young friend.