That doesn’t happen with every state. He lives in NJ, one of the most taxed states in the country. I doubt they let you pay the difference on sales tax. I know California doesn’t.Be sure to calculate the difference in sales tax too. With the trade-in, you only pay tax on the difference in price.
So, in some cases while a third party sale may get you more cash up front, you'll end up paying more on the bottom line.