Just a thought:-
If a dealer/trader 'buys' a car from you (or trade in?) for £10,000, they pay you £10,000 and £0 VAT, as you can not charge them VAT.
If they then sell the car for £12,000, they are actually selling it for £10,000 plus 20% VAT of £2,000.
The £2,000 VAT collected goes to the government, and the dealer ends up with not making a penny profit.
They are a business and are in this to make money at the end of the day.
I am not in the car trade, so I would appreciate any comments if I have got this wrong.