I don't believe that any dealer registers a car that's on their lot but if it's been dealer traded alot, and I assume you're talking about an older, used car (not new) then I'd be suspicious as I'd have to think that they're discovering something about the car that you're unaware of, like perhaps it was in a bad accident with poor bodywork or has another major problem that these dealers think could possibly cause them problems with an unhappy customer.
In this day of age, no halfway decent dealer anywhere wants to sell a questionable used car as they don't want to deal with a customer who'ld be unhappy if ans when they learned that the used car has "issues". Most dealers prefer to sell newer, low mileage cars that in very good condition as that makes their job a whole lot easier and they keep happy customers.
Now, if you're talking about a new car that's been dealer traded, that happens when a car's been sitting on a lot too long and/or another dealer wants it thinking that they either have a buyer or that they can hopefully sell it.

If you're looking at a used car and you think it's at all questionable, by all means take it to another mechanic (who knows newer Volvos) and have it "safety inspected". It'll cost you about 1 hours labor but that way you'll get an unbiased opinion.
Another good program if buying used is to buy a Volvo Certified used car as they have to meet stricter criteria to pass the safety and you'll get an extended factory warranty.