Sales Transaction Process

Valuation of "Trade-in" Vehicle

At the time of the original sales transaction the Retailer must complete a Saturn Moneyback Guarantee Sales Transaction Form (refer to Attachment B for a sample form and instructions for completion on the reverse side). It is required that the vehicle purchaser or lessee sign this form in order to avoid any unnecessary problems or misunderstandings if the purchaser or lessee decides to return the vehicle. This form documents that the customer understands and agrees to the Moneyback Guarantee Program provisions (or understands why the vehicle is not eligible) and also agrees to the "trade-in" value. Retailers must retain their copy of this form with other vehicle purchase documentation.

If the customer trades in their current vehicle as part of the new vehicle purchase or lease transaction, the "trade-in" value is applied toward the purchase/lease price of the new Saturn. This trade-in value is established and agreed upon by the customer and the Retailer when the new Saturn vehicle is purchased/leased.

If a customer returns an eligible vehicle under the Moneyback Guarantee Program, the previously "Agreed Upon Trade-in Value" will be used in determining the customer's refund/credit.

Negative Equity Trade-In Situations

In some instances, a customer may desire to trade-in a vehicle whose value (according to published used car guides, such as NADA, etc.) may be less than the lien amount due on that vehicle. In such a case, the customer has a negative equity trade-in, or what is commonly called an "upside-down" trade-in.

Some banks and financial institutions may not accept a negative equity trade-in as part of a new vehicle sale they are financing or leasing. As a result, some automobile dealers "over allow" on the trade-in (offer the customer a trade-in allowance amount which is greater than the appraised value) to disguise the negative equity trade-in situation in the financing arrangement. In these instances, some dealers increase the sales price of the vehicle to:

7. Offset the negative equity situation on the trade-in to assure a viable gross profit opportunity on the transaction; and,

8. Provide some form of financial protection in case they ultimately sell the trade-in vehicle with the "over allowance" for less than their cost.

Saturn cannot recommend that Retailers enter into the practices described above. Following such practices could subject a Saturn Retailer to monetary risk and uncertainties if a Saturn customer returns a vehicle under the Moneyback Guarantee Program. The responsibility for any such financial exposure resides with the Saturn Retailer.

Saturn's financial participation in a vehicle returned under the Moneyback Guarantee Program is outlined in this bulletin. Saturn's financial responsibility is limited to the Program allowances and Retailer vehicle price, if the vehicle is returned to Saturn, and does not include an amount inflated by any trade-in "over allowance."