A customer's trade-in vehicle on a financed deal may be sold when?

The correct answer states that a customer's trade-in vehicle on a financed deal may be sold only when the financing has been approved and the binding contract has been signed. This is important for several reasons.

When financing is involved, the dealership needs to ensure that the deal is solidified through a signed contract to protect both parties. Until the financing is approved and the contract is binding, there is no guarantee that the terms of the deal will be honored. If a trade-in vehicle is sold before these steps are completed, it could lead to complications such as returning the trade-in after the buyer has signed a different deal or financing falling through. A binding contract provides security and clarity regarding the obligations of both the dealership and the customer.

Completing these steps ensures that all aspects of the deal, including the trade-in value and any financing arrangements, are legally binding and enforceable, thus minimizing the risk to the dealership.