Which of the following statements regarding trade-in allowance is most accurate?
A)Trade-ins are exchanges of one product for another of equal or greater value without an exchange of cash.
B)Trade-ins are an effective way to lower the price a buyer has to pay without formally reducing the list price.
C)A trade-in allowance is only effective when an expensive item is replaced with a less expensive item.
D)Trade in allowances are used almost exclusively with large ticket item and bulk purchases.
E)Trade-in allowances should only be given when the older product is of the same make and model of the newer product.

Question

Quizplus · Accepted Answer

Trade-ins are a way to lower the price a buyer pays without reducing the list price. Trade-ins can involve the exchange of cash or not but the primary purpose is to facilitate a transaction by lowering the effective price. Trade-in allowances are commonly used in many different markets, not just with large ticket items or bulk purchases. The age, make or model of the older product being traded-in may impact the value of the trade-in allowance, but does not necessarily restrict the use of such allowances.

Which of the Following Statements Regarding Trade-In Allowance Is Most