The Cap1 Pre-qualification for auto loan site is a SP and not an actual approval.
If they pre-approve you, you will go to the dealer who will do a HP as part of the process.
The situation you are describing happens all of the time. People still owo on their car and want to trade it in on a new or newer vehicle. The dealer pays off your old loan and uses any equity left (amount they give you for the trade minus the amount you owe on the trade) toward the new car. Just be careful as the dealers sell cars all day long and they have plenty of techniques to take your money!
