When can a customer’s trade-in vehicle be sold on a financed deal?

The correct answer is that a customer’s trade-in vehicle can be sold on a financed deal only when financing has been approved. This is because the transactional integrity of the deal relies heavily on the financing being secured before finalizing the sale of both the new vehicle and the trade-in.

In many cases, financing approval signifies that the lender has agreed to provide the necessary funds to complete the purchase, which often includes both the price of the new vehicle and any equity gained from the trade-in. If financing has not been approved, the dealership bears a significant risk since they cannot be guaranteed payment for the trade-in, thus leading to potential complications in the sale process.

The situation is different if the vehicle is already in the dealer's possession or if the buyer's order is signed; these milestones do not ensure that the sale can be finalized financially, as the actual control and financial commitment come only with financing approval. Therefore, the transaction is only secure and guaranteed when financing is confirmed.