You can but it’s not going to save you much. It is good for recycling the watch, however, so you’ll know that the watch is going to be either refurbished or stripped for parts.
Trading in an iPhone when getting a new watch, however, is a great idea, and you should definitely consider it. In fact, some of the best deals we’ve ever seen have come from iPhone trade-ins, where you get a brand new iPhone for free when you trade in. That could well leave you with more money to buy an Apple Watch or even an iPad.