“How can we ensure that we’re determining the best value for a customer’s trade and obtaining all required disclosures?”

The MVDA requires dealers to obtain specific information about a trade-in’s previous use, history and condition. Acquiring a trade-in disclosure document, consulting a reliable history report and conducting a thorough visual inspection should be part of every dealer’s due diligence. This can be used to help determine a trade’s value and provide mandatory disclosures when wholesaling or retailing the vehicle later.

The Best Practice

When taking a vehicle on trade:

• Have customers complete a trade-in disclosure document
• Run up-to-date vehicle history reports, one on the appraisal date and another on the date of sale as it is possible for new information to appear on the report
• Conduct a thorough inspection of the vehicle and maintain a record of any repairs completed or required
• Use a paint thickness gauge to check for body repairs the customer didn’t disclose or was unaware of
• Dealers could also establish a policy requiring managers or staff who conduct appraisals to have trade-ins undergo a mechanical/body inspection if the manager determined a trade-in’s value is greater than $XX,XXX (amount to be set by the dealer principal or person-in-charge)