I would never consider trading in a car that was underwater. Even if it’s ugly or out of style, you have to keep it until it is (1) worth far more than you owe, or (2) completely and totally dead. Actually, I never trade in any car until it needs more work than the car is worth, but trading in while it’s still drivable and you owe money seems shockingly irresponsible. And if your family grows and no longer fits? You plan for that before you buy the car or before you have more kids.
I saw a beater that had this bumper sticker: "Out of date, but out of debt".
My philosophy as well.
All my old cars go to my kids who squeeze a few more years out of them before the car goes completely Tango Uniform.
Worth nothing at trade in.
And it helps my “new” cars are generally one year old with 15K miles when I buy them.