If the appraised value of a vehicle traded-in is less than the outstanding balance on the installment sale agreement, which action is permissible?

When the appraised value of a vehicle traded-in is less than the outstanding balance on the installment sale agreement, allowing neither an increase in the down payment to match the balance nor altering entries on the installment sale agreement is the correct approach. This situation typically arises due to regulations and ethical practices governing financial transactions in vehicle sales, which aim to maintain transparency and prevent misleading representations.

Increasing the down payment or modifying other entries can create a deceptive environment that could mislead customers about their financial responsibilities. Such practices might potentially violate consumer protection laws or regulations that ensure purchasers are fully informed and protected in their transactions.

Offering a cash rebate may seem like an enticing option, but it could also complicate the financial structure of the deal, potentially leading to more issues regarding financing agreements and the ethical treatment of customers. Therefore, the action that maintains integrity and complies with the necessary regulations involves not pursuing either of those options, which is reflected in the correct choice.