In PA dealers are allowed to do what's called a "courtesy trade". It allows the (used car) seller to take full advantage of the sales tax deduction and the dealer collects the tax from you, the used car buyer. I believe it's still common practice.

The state likes it because they know they are collecting 100% of taxes due. Dealers like it because it gives them a chance to meet you at one of the few times you actually LIKE going to the dealer. Plus the dealer makes a few bucks on the tag service etc. As for the buyer, well, you don't get to lie about what you paid for the car (who does that anyway?).

So your friend doesn't need to lose anything IF his dealer is willing to offer that service. Just call them and ask if they offer courtesy trades to their customers.