Yes, you can absolutely trade in a car with a bad engine, but you need to go in with realistic expectations. Dealerships will accept almost any car as a trade-in because their primary goal is to sell you a new one. However, a non-running vehicle is categorized as "as-is" and its value will be significantly reduced. The dealer will factor in the cost of a replacement engine (often a used one from a junkyard) and the substantial labor required, which can easily run into thousands of dollars. This cost is then subtracted from your car's potential wholesale value in good running condition.
The final offer might feel low, but it can still be more convenient than a private sale. Selling a car with a major mechanical failure privately is challenging, time-consuming, and often attracts only lowball offers from scrap yards or mechanics looking for parts. A trade-in simplifies the process; you handle everything at the dealership, and in many states, the trade-in value reduces the sales tax you pay on your new car purchase.
Before you go, get a rough idea of the numbers. Know your car's Kelley Blue Book (KBB) value in "Fair" or "Poor" condition. Be prepared to be transparent about the issue. Getting quotes from a few different dealerships and even a local scrap yard will give you a bargaining range.
Here is a simplified example of how a dealer might calculate an offer for a 2017 Honda Civic with a blown engine:
| Description | Estimated Value / Cost |
|---|
| Wholesale Value (Good Condition) | $12,000 |
| Cost of Used Engine | -$2,500 |
| Labor for Engine Swap | -$1,800 |
| Potential Profit Margin & Risk | -$1,000 |
| Estimated Trade-In Offer | $6,700 |
This table illustrates why the offer is a fraction of the car's functional value. The convenience of the trade-in is the key benefit, offsetting the lower monetary return.
