Trade-In Allowance
Definition for canada automotive professionals.
The dollar amount a dealership credits toward a new purchase for a customer's existing vehicle. Trade-in allowance may differ from actual cash value (ACV) — the difference is effectively a hidden discount. Over-allowance occurs when the trade-in credit exceeds ACV, transferring margin from the front-end deal to the trade-in line item. Because over-allowances shift profit between line items without changing the customer's out-of-pocket cost, they are one of the hardest forms of margin leakage to detect. DealerInt tracks trade-in over-allowances as a form of pricing override, flagging the delta between ACV and credited allowance in real time so managers and GMs can see exactly where front-end gross is being given away.
Canada Context
In the canada dealer market, trade-in allowance operates within the context of Provincial dealer licensing (OMVIC, AMVIC, SAAQ, VSA) and Competition Act — transparent pricing. Dealerships running PBS Systems, Quorum DMS, CDK Canada encounter trade-in allowance in their daily workflow. DealerInt captures the decision layer around trade-in allowance that your DMS wasn't designed to track.
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