Help me understand the car sell game

So I have a car that’s upside down by 12k and the value is 20k. I thought if I get a bigger vehicle that I want for ($27k) I can use my car value ($20k) put towards the car ($27k) I would finance the rest meaning ($20k) after taxes and negative total. I guess it doesn’t work that way. They give you the value of the car ($20k) which leaves ($7k) that plus dealer tag and taxes will be added to your whole balance of ($32k) making everything ($40k). Is this correct?

Yes, that's how it works. If you are already upside down then going to a more expensive car will put you even more upside down. My cousin had a wife (now ex) that caused them to be so far upside down that they basically paid $40k for a $20k vehicle.

The best piece of advice I could give is to just pay as much as you can toward your current vehicle every month. If your payment is $500 try to pay $700, or more to knock that balance down. If I wouldn't have been paying extra on my Lancer I'd be very upside down on it right now, but I haven't even had it 4 years and I am now ahead of the game so if I wanted to get rid of it I wouldn't have to add anything to the replacement.