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Here's the short version how trading "up" or "in" at a dealership works..
The dealership makes money.
You lose money.
Only you can decide whether the amount of money you lose is worth the happiness or whatever other good feelings you gain by having a newer or "better" car. The most cost efficient car, for almost all practical purposes, is the car you currently own (assuming you have it paid off).
I second/third/fourth all of the other posters who've suggested you firmly, professionally, and politely require the dealership to fix your problems under warranty.
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