By Anthony Santiago - Editor-in-Chief

June 27, 2023
can you trade in a car with a bad engine

Can You Trade in Car with a Bad Engine?

If you are seriously considering getting rid of your car with a bad engine, this article is for you. There are many reasons why your engine might be bad. 

From oil starvation, spun bearings, and leaking head gasket, these issues will cause your vehicle not to run correctly and possibly smoke like crazy. 

So, can you trade in your car with a bad engine?

Yes, you can but expect little money. Most, if not all, dealerships will require the vehicle to be able to drive on their own power. 

If you have a seized engine, you will be better off listing your vehicle on Craigslist or FB marketplace. You can find local buyers who will buy parts or attempt to repair themselves.

If your vehicle can be driven but has a ticking or knocking noise but can move on its own power, the dealership may take your trade-in. However, the dealership will lower its offer in order to leave room for profit. 

For example, if the vehicle is worth $12k and in good condition but was diagnosed to need a new engine, the price might be 50% less to leave room for repair costs. Sometimes, a new engine really requires the engine to be rebuilt due to a timing chain guide or head gasket issue. 

Key Takeaway

  • Trading in a car with a bad engine is possible. Some dealerships will accept trade-ins even if the engine has significant issues. However, the trade-in value may be lower than if the engine were in good condition.
  • Not all dealerships will take cars with major issues, so it is important to research and find a dealership that specializes in accepting trade-ins with problems like a blown engine.
  • Advantages of trading in a car with issues, the convenience of trading in a car is often worth it. Additionally, dealerships are often willing to offer competitive prices for these types of vehicles.

Trading in a Car with a Bad Engine - What You Need to Know

If you plan to trade in, I will review everything you need to know about trading in a car with a bad engine. 

From my experience, a bad engine or transmission replacement is the biggest high-ticket item for repairing a vehicle. Unfortunately, depending on the severity, you could spend thousands of dollars. 

Let's take a look at the underlying causes.

Causes of a Blown Engine

Engine failure can happen for many reasons. Inadequate upkeep, not enough oil changes, and coolant leaks, as well as too much heat, are common causes. 

Factors like flood waters, bad fuel, failed belts and snapped timing belts can also be to blame. Belts and hoses can affect the engine, and parts breaking can affect the whole car. 

A bad engine can cost thousands of dollars to replace or repair, depending on what is wrong with the car.

For example, it's clear engine issues are more than the tailpipe smoke. However, a blown engine doesn't have to mean you can't trade in your car if you take action. Knowing what causes a blown engine and doing something to stop it can save money and keep your vehicle running well.

Symptom - Cause - Potential Costs

  • No Start
  • Running Rough
  • Smoking - Depending on the color
  • Knocking
  • Overheating - Coolant and Oil Mixing
  • No power - Limp Mode
  • Rough Idle - Low Compression

Can You Trade in a Car with a Blown Engine?

Can you trade in a car with a blown engine? Yes, you can! Most dealerships are willing to accept vehicles with engine troubles. They determine the value based on the make, model, age, and how bad the damage is.

From a recent survey, it depends on the dealership. Vehicles with engine troubles that are apparent would typically be sent to auction. Dealerships normally only keep cars that they can easily recondition and sell on their lot. 

No dealership would want to risk its reputation by reselling vehicles with bad engines. It's bad for businesses and would damage their image. 

Ari from suggests that if your car is in this category of an auction vehicle, then you are better off trying to sell locally, as mentioned previously. 

Advantages of Trading in a Car

Trading in a car with issues might seem daunting, but did you know there are advantages to doing so? 

If you prefer to avoid listing your vehicle locally for sale, then there are real benefits to trading in your car with problems. 

As they say, time is money; in this case, you will be trading potential profits for the easy convenience of trading at the dealership. 

Competitive Offer from the Dealership

Of course, when trading in a car with issues, you want a competitive offer from the dealership. Most dealerships will indeed consider the trade-in. Even a vehicle in poor condition can still fetch between $500-$1,000

This data was compiled from several dealerships that will take a trade-in to make a deal on the vehicle on the lot. 

They can take on this risk because they can assess the car's marketability and decide if it can be resold or used for parts.

Remember, trading in with a dealership is faster than selling to third-party buyers. A big benefit of getting a competitive offer from the dealership is that consumers can avoid time delays and costly repairs. 

In summary, trading in your car with a dealership may be simpler than finding someone on Craigslist wanting a broken-down vehicle.

Pro tip: shop around multiple dealerships to see which values your car better. Negotiate for a better price.

Another tip is to ensure your car is in as good of a condition as possible. Check out the other article about how to maximize trade-in value

My friend tried to trade in his car with a blown engine at various dealerships but was turned down due to its condition. But he eventually found a dealer who recognized the car's value and gave him a reasonable price.

Other Common Car Issues for Trade-In

In addition to engine problems, I will review some of the most common car issues that may lead consumers to believe that a dealership won't accept their trade-in vehicles. 

Consider trading it in when vehicle repairs continue to rack up month after month. I will review the top issues you should consider if your vehicle hurts your wallet. 

Blown Engine

A blown or bad engine means your car needs a new engine to run optimally. Causes can be lack of maintenance, overheating, low oil, leaking head gasket, or piston issues.

Broken Transmission

Another repair that will have you consider trading in is a bad transmission. A broken transmission typically has a symptom of slipping between shifting or no reverse gear. This causes the car to be difficult to drive. Consumers may think the dealership won't accept their vehicle. But, a dealer might accept that trade, especially if it's the same car brand. 

They have experienced technicians who can understand the issue and fix it or use parts from the car.

Dead Battery

A dead battery is NOT a serious issue. Commonly if a battery does not charge, it is frequently associated with a bad alternator. The alternator charges the battery as the engine is running. So, don't be discouraged if your car has a dead battery or other minor issues.

If you replaced your battery, which always seems dead, have your alternator checked. 

The other issue for a dead battery is a parasitic drain. This happens when an accessory like a charger or aftermarket radio drains the battery overnight. Remove any third-party items and see if that resolves your issue. 

For example, Carfax reports that dealerships typically accept cars older than five years with no problems since these cars have little demand at auction. 

Electrical Issues

A car with electrical issues can affect its trade-in value. To increase the value of a good trade-in offer, prioritize repairs, if possible, before trading in. 

Electrical problems may be difficult to trace if the wiring harness is damaged, but most dealerships will be able to address this. 

However, water intrusion that may have caused electrical issues are more difficult to repair and may require modules to be replaced and recoded. But, experienced dealers who specialize in fixing these issues may still see its value. 

Bad or Broken Brakes

Bad or broken brakes can be a major safety risk. However, if it's just a seized caliper or warns pads, it's an easy fix. 

Bigger braking issues like no stopping power or broken brake lines are more expensive. It may require running a new brake line and routing them in the proper position. 

Remember, dealerships may be reluctant to accept cars with major mechanical issues. But most of the time will take the trade-in as long as it runs and drives. 

Fuel System Issues

Fuel system issues refer to any problems related to the mechanism that delivers fuel to the engine. These issues can make a car stall or not start at all. So, dealerships may not accept them for trade-in or sale. Most dealerships need the car to be running to accept. 

Dealerships have reported that they will not accept any towed or trailered car as a trade-in.

Final Thoughts

Trading in a car or vehicle is possible despite potential mechanical issues. It's very common for owners to pass off vehicles to dealerships that need some reconditioning.

Depending on the dealership, it would be advantageous to trade in your vehicle at the same brand or at a mom-and-pop dealership that could tackle repairs to prepare it for resale. 

Otherwise, most dealerships will send the vehicle to auction. A blown or bad engine will typically cost at least $1,500 - $2,000 starting to replace the engine in labor fees. This does not include the engine itself. 

However, the trade-in value you are offered already considers the profit margins of selling the vehicle at retail. Commonly, the trade-in value is 60%-80% of the retail price. Dealerships normally aim for 20% profit for each trade-in.


Can you trade in a car with a bad engine?

Yes, it is possible to trade in a car with a bad engine at a dealership. However, the dealership may only accept the vehicle for trade-in if they see value in broken-down cars. A blown engine is a serious problem that can cause catastrophic internal mechanical damage.

What are the common causes of a blown engine?

The four common causes of a blown engine are a valve punching through the top of a piston, a broken connecting rod, complete engine oil depletion, and depleted coolant. A broken valve or connecting rod can cause hot, pressurized oil and blue smoke to shoot out of the engine, and the car will stop running without a working engine. Losing oil or coolant can cause moving parts to seize up and cause tremendous damage to the engine.

What should I do if something goes wrong when attempting to sell my car with a bad engine?

If something goes wrong when attempting to sell your car with a bad engine, it is advised to wait a moment and try again. The issue could be related to technical difficulties or the wrong wait moment. Alternatively, consider trading in your old car at a dealership that may accept a vehicle with a bad engine.

Can I trade in a car with a broken connecting rod?

You can trade in a car with a broken connecting rod at a dealership. However, the dealership may only accept the vehicle for trade-in if they see value in broken-down cars. A broken connecting rod can cause hot, pressurized oil and blue smoke to shoot out of the engine, and the vehicle will stop running without a working engine.

Is it better to trade a car with a bad engine or sell it to a private party?

When trading in a car with a bad engine, a dealership may offer more convenience than selling it to a private party. However, selling privately typically yields more money since the right mechanic could sort out mechanical issues. Deciding to trade in or sell to a private party depends on individual circumstances.


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Anthony Santiago - Editor-in-Chief

About the author

I am a passionate car enthusiast who likes to help people save money and avoid headaches when it comes to cars. I believe that everyone can find the right car at the right price. I share my tips and experience so you can learn quickly and maximize your next SUV, truck or car purchase.

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