Is this a reasonable action for a car trade?

I went to a big used car dealership in my area (hundreds of cars!!) and mulled over a 2009 Chevy. A salesman appeared and talked up the car. I balked: I still owe several thousand on my current 2004 car--more than it is now worth. He then told me that I could have the bank take back the car and I'd be free and clear to come in and buy the 2009 car. Whaaat--???? This sounded fishy! I didn't give in, I was able to escape unscathed. But the idea is still bothering me...is it possible to do this? Or would I be in trouble with the bank?