Question

A trade-in is most closely related to which of the following?
a.
A down payment, because it reduces the amount financed.
b.
An interest payment, because it represents value given to the dealer.
c.
The list price, because it is derived from the price of a car.
d.
Amortization, because it is a way of paying for car financing.

Answer 1

a. A down payment, because a trade-in reduces the amount you need to finance by crediting the value of your old vehicle toward the purchase.