Q. I have a truck that's too big and drinks gas. Although we still owe $11,000 on it we'd like to trade it in for something that costs around $14,000 and we can afford to go places in. How does trading in a vehicle that you owe money on work?

A. When you trade in your truck, the dealership will determine how much it's worth. It will then payoff your loan and apply whatever's left to the purchase of a new vehicle.

Let's say, your truck's trade-in value is $15,000. The dealership will give your lender $11,000 and apply the remaining $4,000 to your new purchase.

Before you go car shopping you should get a good idea of how much it will fetch from the Used Car Appraiser at Edmunds.com.

This calculator will ask for lots of information about you vehicle, from the make and model to its mileage and optional equipment. In the end you'll be given three values. The lowest is what the car would be worth as a trade in, or being sold by an individual, or by a new-car dealer.

The only potential problem is if you're upside-down on your loan, which means you owe more than the truck is worth. That often happens in the first couple of years of long, 60- or 72-month loans because new vehicles depreciate faster than you can pay down the debt.

But most of the time we're only talking a $1,000 or $2,000 difference. Since lenders routinely finance 120% to 130% of a new car or truck's sticker price, they can roll that negative equity into a new loan.

If you have bad credit, and you're five or six grand in the hole, a lender might require a small down payment -- $500 or so. But it still shouldn't be a deal killer.

Adding old debt to new debt isn't something you should do very often. But it makes sense if you're moving to a vehicle with lower operating costs.