Record the trade-in's details and condition on an appraisal form, agree the allowance, and find out whether a lender holds a lien and what the payoff is. In a deal, the allowance reduces the amount taxed in many regions, while the lien payout is added to the amount the buyer owes. Authorise the payoff in writing.
What to capture
- Year, make, model, VIN and odometer.
- Condition notes and any known problems.
- The allowance you offer.
- Lien holder and payoff amount, with the date it is valid to.
How it affects the numbers
In Dealer Garage's deal builder the trade-in value is subtracted before tax is applied, and any trade-in lien payout is added back after tax. Tax treatment of trade-ins differs by region, so confirm how yours works and set the tax lines accordingly. See the deal builder.
Paperwork
The trade-in appraisal form and trade-in payoff authorisation are in the at-sale set.
Appraisal checklist
- Inspect the car inside and out and take photos.
- Check the VIN and odometer.
- Ask about liens and get a payoff figure.
- Compare with similar cars for sale in your market.
- Write down the allowance and have it acknowledged.
Questions people ask
Who pays off the lien?
Usually the dealer pays the lender from the deal proceeds under a written authorisation. Check the terms and timing.
This is general information, not legal advice. Rules differ by state, province and territory and change over time; confirm what applies to you with your regulator or a qualified adviser.
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