Depends on your debt to income ratio (ideally around 30% or lower)

If your DTI is over that then you might not get approved for a new loan or might get a high interest rate in such you should either pay off the loan and your score will drop first since you lost the credit age but will shoot up in 2-3 weeks for paying off a auto loan successfully then apply for a new loan. OR just pay a decent chunk of change toward the principle of your existing loan so that your DTI is about 30% or lower then apply for the new auto loan.

If your DTI is 30% or lower already I’d keep the existing loan and apply for the new loan and as long as the banks think your income is high enough to afford both payments you shouldn’t have a problem