The thing about losing the 20% VAT as soon as you buy the car is flawed and just a trick of the trade used by dealers to pay less for part exchanges. A car is worth what someone will pay,
Precisely, which is why dealers pay less for cars. The seller always has a choice: do they accept the lower price offered by the dealer, or do they opt to sell the car privately for more?
Many people prefer to trade in their old car when they buy a new one, because it's easier, less risky, better for their cashflow, they might not have room for the additional car while they wait for the old one to sell, and many other reasons.
When a buyer looks to purchase a nearly new car at a price that is above the original pre-VAT price, they are making choice. They don't have to buy at that price, they don't have to give the profit to the dealer if they don't wish to.
To suggest that the lower price offered to trade-ins by the dealer is a 'trick of the trade' is a bit unfair considering the service they are providing, I think.
