Can I trade my car in after 3 months?

Buying a car can be one of the most exciting and yet also one of the most regrettable things we do. Once the excitement of the purchase wears off, buyer's remorse can set in, where the vehicle seems ill-fit for your lifestyle; perhaps you could afford something better or need to downgrade; either way, the thought of training your vehicle in has crossed your mind.

Suppose you have owned your vehicle for three months when circumstances change, whether personal or financial, or you have found a car that better suits your lifestyle and budget. Can you now trade in the vehicle you purchased three months ago? 

Can you trade your vehicle in after three months?

The answer is yes; no rule stipulates a specific period after which you can or cannot trade your vehicle. However, there are most certainly some practical considerations that need to be outlined. The first and, indeed, the most significant concern is depreciation.

Depreciation

The moment a vehicle leaves the showroom floor, it is now pre-owned. It is, therefore, subject to depreciation, which in some instances is steep, particularly in premium cars. This means that after three months of payments, you will likely owe more on the car than it is worth when trading it. If your situation demands a trade-in, you can, in most instances, load the shortfall of the car you are selling into the finance deal of the new vehicle you are purchasing. There is also the option to pay the shortfall if you need to get out of the contract as soon as possible.

Exceptions

If you have purchased a vehicle that is limited in number or in high demand, you may get away with trading it for the same, or perhaps even more money than you purchased. This can also be the case if you have purchased a pre-owned vehicle for below market value, allowing you to break even or make a small profit from the deal.

All deals are different.

Since all cars are different when looking at depreciation, and indeed, all finance deals differ in terms of deposits, the length of the contract, the interest rate and other inclusions such as balloon payments and such, the exact best time at which to trade your vehicle can be ambiguous. We would recommend that you have a look at when exactly you will pay off the interest owed on the car, as from this point, you can start seeing your money paying the actual vehicle itself off, allowing you to move towards having equity in the car, therefore making it a better time to sell.