Trade-in offer

Updated: Aug 20, 2021

In selling certain consumer durable goods vendors often offer what are referred to as trade-in terms. This means that they will make an allowance for an old model handed over as part of the contract. Most trade-in offers are a form of price cutting in so far as the vendor cuts his profit for a quick sale, not expecting to gain anything for the model taken in part exchange except its scrap value. In the motor industry models taken in part exchange are, how¬ ever, often dressed up and resold at a price that may either extinguish the loss of profit on the new car sold or, in some instances, actually increase the gain on the whole transaction.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.