No doubt he still had a loan on the previous truck that had to be paid first. He might have received a good trade-in value, but the old loan had to be paid first. Now (if anything) is left over, that is applied to lower the cost of new vehicle. Chances are, trading a truck that new, he still owned a bundle on it. He might have received a good trade in, but, unless the truck was 100% paid for, he did not get 100% of the trade in value applied to the new truck.
He probably broke even at best, maybe even in the hole, thus the reason for the $30 increase. How LONG are his terms? 4 year, 5 year, 6 year, or more? When we got our last truck (band new), we were offered a 7 year repayment schedule. We opted for 5 years, up-ed the payments a little to save interest over the long term.
The problem with dealerships now a days, they offer financing over longer periods of time to make the monthly payment fit even the most humble of incomes. But over all cost is much higher because of all the interest paid during that time. Oh, dealers and banks love longer terms for this very reason!
Ask your friend how much of that $63K was applied to the purchase of the vehicle and how much was pay-back to his original loan?
