Under-Allowance

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Under-Allowance

In auto sales, the act or practice in which a dealership pays less than the actual value for a trade-in. Suppose a customer has a car worth $5,000 and wishes to buy another worth $10,000. In an under-allowance, the dealership may accept $3,000 for the trade-in, leaving the customer to pay $7,000 for the new car.
References in periodicals archive ?
Within the first few months of implementing Phynance, CSANT was able to identify more than $100,000 in under-allowances. Moreover, from the November 2001 go-live to present, CSANT has identified more than $1.2 million in under-allowances that are currently in appeals.