Yes its is up to the dealer to sell if they want to, But many dont as it is to much hassle to do so.From a local BMW dealer: Once the car is traded in, it is up to us whether we claim £1k from government or sell it on. If we claim, then the V5 goes back as scrapped.
So they CAN actually sell it on? (i.e. the dealers? - but once it reaches the local scappy its there to stay...)
Good news i work in the motor trade and just to let you know that the scrappage as ended there is no more money to be given out to dealers! ITS OVER!
many dealers are doing there own version called swoppage that give up to £3K for your old car but thats UP TO 3k so they wont give that to a classic mini as they will only go on the book price. My mates 99 V reg Downton is booking at 1K even though it worth alot more than that.