Bottom half of a white car on a repair lift.

Can You Trade In a Car That Doesn’t Run?

Hanna Kielar6-Minute Read
February 22, 2022

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The used car market is hot right now. It’s a great time for car owners to cash in by selling or trading up. Yes, you can even sell your broken car that’s been sitting in your driveway for months while you decide what to do with it.

Trading in a car that doesn’t run is going to be more challenging than if it were in good condition, but not impossible. Many dealerships won’t accept salvage or junk cars because it's simply easier and more profitable to buy and sell cars in good condition.

Let’s find out when it’s worth repairing your car on its way to at least “fair” condition for a trade-in and when it’s time to sell for parts.

When It’s Worth Repairing A Damaged Vehicle

While you can trade in a damaged car, it’s worth doing a bit of math to see if repairing it is wise. First, you’ll need to see what your car is worth as is, with no repairs. Then you’ll need to compare costs of repairs against how they will affect the value of the car.

There’s a good reason to figure this out ahead of time. When potential buyers see any major repair work or accidents listed on a vehicle history report, it brings the value of the vehicle down. Even if the car has been fixed, buyers often think the it has been compromised. A damaged quarter panel may have been replaced, for example, but maybe a spring down on the chassis was also damaged and passed notice.

Depending on what kind of repairs you have made to the car, or what kind of repairs it still requires, repairing your vehicle could lower its market value. But in other cases, it can help raise your car’s value so you can sell it for a better price. Step 2 ahead tells more about how that can work.

Finally, before investing in repairs to your car, you’ll need to look at the equity you might have in the car. Step 3 will explain more about finding out if you have positive equity or negative equity in your vehicle.

Step 1: Find Out How Much Your Vehicle Is Worth

It’s crucial to know how much your car is worth before you begin negotiating with a dealer. Kelley Blue Book will calculate its market value with just a vehicle license plate number or vehicle identification number (VIN) and the valid ZIP code you’re trying to sell from. Next, you should schedule a visual inspection at a couple of dealerships. That way you’ll know more about how the condition of the car affects the value.

For example, a 2017 Nissan LEAF in good condition with average mileage has a trade-in value of $8,128. Once priced in the “fair condition” bracket, requiring some mechanical repairs, the trade-in value goes down to $7,485. It wouldn’t make sense to make repairs that exceed $643, the difference in value.

Make sure to be honest about the condition of your car when filling out online forms to estimate the value so that there are no surprises when you try to sell it later.

Step 2: Compare The Cost Of Repairs With Trade-In Value

Let’s say you want to trade in your Nissan LEAF but it has body damage that would cost less than $643 to repair. In that case, it could make sense to work with a mechanic and recoup a couple hundred dollars.

If you’re in the unfortunate position of owning a car with mechanical problems bad enough to make it inoperable, be sure to factor in towing costs for a vehicle pick-up along with the repairs. If this is the case, you have a few options. According to Kelley Blue Book, if you do not plan on repairing the car, you can keep it and use the parts for another car, sell the parts to someone else, sell the car to a junkyard, or donate it to a charity.

It will be more difficult to sell your damaged, non-running car but not impossible. We’ll go over some options later.

Step 3: Assess Your Equity

When it comes to cars, think of equity as the difference between the money you’ve invested in your vehicle and its resale value. No matter the resale value, you’re financially obligated to pay off your auto loan, so factor your payoff amount into the money you have invested. Positive equity means you stand to make a profit off your car if you sell. Negative equity means you’ll owe more, or will have invested more, in the car than it’s worth.

Trading in a car that is not paid off is more common than you may think. If your trade-in value is less than how much you have left on a loan, expect to continue paying off the difference, even after you sell the car. For example, you were able to trade in that Nissan LEAF for $7,000, but still have $10,000 left to pay on the loan, you will still have to pay off that remaining $3,000. That would make you “upside down” meaning you have negative equity in your vehicle.

In this case, you may want to consider taking the time and energy to sell to a private party. In a private, direct to consumer sale, you have a better chance of getting full market resale value for the car. A dealer will typically pay less than full resale, because the dealer has to turn around and sell the car and they want to make a profit on the sale. Because trading a car in to a dealer is so convenient and trouble-free, people often sacrifice a significant amount of money they might have made by selling it themselves.

How To Sell A Car With Known Problems

As long as you disclose any known issues with your buyer, it’s not illegal to trade in a car with problems. In fact, you can’t hide much after a dealership inspects your current vehicle and assesses its value. Let’s look at some options.

Set Your Expectations For A Trade-In

How much you’ll get if you want to trade your car for another one depends on how many issues your car has. If you already have a sense of how trade-ins work, you’ll know that dealerships will follow a similar process as the steps you just completed:

  • Determine the vehicle value.
  • Find out if it's worth fixing.
  • Decide whether to auction it or sell it for parts.

Minor collision damage will often be easy and cheap for dealerships to repair. That said, if you’re trying to trade in a car with major issues like transmission problems or a blown head gasket, then lower your expectations. It costs thousands of dollars to repair transmission, engine, or other mechanical failures. Expect the dealer to subtract the cost of those repairs from the negotiated value of your car.

Prepare To Negotiate

Whether your car needs a new bumper or a new engine, make a point of negotiating the value of your current vehicle separately from the value of the vehicle you’re trading it for. Sometimes, you may be offered a higher trade-in value for your current vehicle only to realize the costs of repairs needed were tacked onto the price of your new car. Considering these as two separate transactions could help you get the best deal for your sale and new vehicle.

Sell Directly To The Scrapyard

By now, you probably know to expect very little trade-in value for a car with a bad transmission or mechanical issues. The few dealerships that will buy salvage or vehicles in poor condition will likely ship your broken car off to a car auction where it will be sold for parts.

If you have the time and energy, you can cut out the middleman and sell your car directly to the scrapyard or take it to auction yourself. You’ll likely make more money selling your junk car to a scrapyard than trading it in if it doesn’t run.

The Bottom Line: Sell, Don’t Trade Non-Running Cars If You Can

Call several different dealerships in your area and compare their potential trade-in valuations for your current vehicle. If you’re trying to trade in a broken car that has mechanical issues beyond simple repair, consider cutting to the chase and selling your junk car as is, for parts. As always, working with dealerships will prove to be the most convenient, one-stop-shop option, though you do pay for that service one way or another.

No matter who you decide to sell your car to, make sure you understand how trading in a car works and how to negotiate the best deal.

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Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.