Read your contract. It likely says that anytime you are in DEFAULT, the collateral may be repossessed. That means ONE (1) day. NOT months, weeks or payments. LENDERS AND BANKS ARE TAKING MANY CHANCES IN THIS ECONOMY.
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You absolutely can trade in your vehicle even if you are behind on your payments. When you trade a vehicle in the dealership you are purchasing from pays off your previous loan in full, so being behind on your payments will not affect anything other than the total amount due on your car. Of course when the new dealership runs your credit report it will probably reflect that you are currently behind and will also show how many months you are behind.
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