What must dealers do regarding security interests on trades?

Clearing security interests on trades is a crucial responsibility for dealers in the context of manufactured housing. When a dealer acquires a trade-in vehicle or manufactured home, they must ensure that any existing security interests or liens against that item are resolved. This means that the dealer must take necessary steps to pay off any outstanding loans or obligations linked to the trade-in, thereby freeing the title from any encumbrances before it can be legally transferred to a new owner.

By clearing security interests, dealers protect both themselves and their customers, ensuring that the new owner receives a clear title and is not burdened by previous debts associated with the traded item. This action enhances consumer confidence and complies with legal standards in the sale and transfer of ownership.

The other options involve aspects that are less relevant or not mandated in the context of handling trades. Recording security interests with the main office, notifying customers about any interests, or prolonging the interest period do not align with the immediate legal and practical necessity of ensuring that all debts tied to a traded item are settled before the sale process is completed. Therefore, clearing the security interests is the essential step dealers must follow.