TaxGuyBill
Level 15

I suggest looking at the paperwork to check if it is a true direct replacement.

From what I've read, it is more common for the manufacturer to buy the vehicle back, which I would think would be treated as a sale.

Even if your client receive a new vehicle from the same manufacturer, it is possible the paperwork shows it as a sale of the old vehicle (the manufacturer is buying it back), then as a separate thing, a purchase of a new vehicle.