Can I Trade In My Car After 3 Months?

Walking out of a dealership with the keys to a shiny car is a dream-come-true for many individuals. You are longing to show it off to your friends and relatives and take a ride to the scenic places you know. Unfortunately, when you start the engine and hit the highway, you feel that you are driving the wrong car.

Maybe you do not like how the steering wheel feels and how the vehicle turns as you hit corners, or how the engine performs on the highway, and you dismiss the signs and hope you will get used to your new ride. Three months down your contract, you are now sure you do not like your ride, and you are struggling with the thoughts of can I trade in my car after 3 months?

Most car lease contracts do not have a limitation of when you can trade in your car, but we advise that you read fine prints to be sure. You will also need to understand the complications and financial implications that will occur if you choose to trade in your vehicle early. We will help you answer can I trade in my car after 3 months and give you alternatives in this article.

Can I Trade In My Car After 3 Months?

Yes, it is possible to trade in your car after only 3 months, but that is where the simplicity to can I trade in my car after 3 months ends. We do not recommend that you trade in your vehicle in the first few months due to the financial implications of ending your lease early, as you will not recoup the money you have spent on the car. You may also have to continue paying for the car that you do not have. You should review your leasing agreement and understand the financial penalties before you decide to trade in your vehicle after only three months.

Although you are unlikely to find a clause that prevents you from trading in your car within three months in the lease contract, you will likely face a prepayment agreement if you end the lease early. You will also have to pay the full amount you owe on loan, which is likely to be more than your vehicle’s value. Although your vehicle is technically new after only three months, the tilting act lowers your car’s value by up to 30 percent, immediately after you sign the lease documents. Furthermore, the dealership may not negotiate the price, which means they will value the car the amount you would get at the lease-end.

It is expensive to trade in your vehicle after three months as you will likely be paying for depreciation and interest rate unless you included a large down payment or trade-in when signing the lease. It is good to wait until the price evens before you consider trading in your automobile. That said, if you are hell-bent on getting rid of your car, we recommend that you look for trade-in alternatives that will maximize your returns, such as a lease swap. You will likely reduce your loss and maybe make a profit if you find a buyer willing to take over your lease.

What Happens If You Trade In Your Car After 3 Months?

At three months, you are likely to owe more than the car’s value, which means you have negative equity. Negative equity occurs due to the high depreciation of new cars. Depreciation is highest in the first year, with some cars depreciating as much as 30 percent. How quickly the vehicle depreciates depends on several factors that include brand, make and market factors. It is never a good idea to sell a lease vehicle as high depreciation makes it difficult to earn a profit from your investment.

That said, most dealerships make it easier for people with negative equity to trade in their car by rolling over the balance into your new loan. Rolling over the balance into a new loan means that you have to pay more in interest over the loan duration. It also puts you at risk of being upside down with your new car, which could lead to negative equity by the lease-end of your new car.

When Does It Make Sense To Trade-In Your Car After 3 Months?

While we do not recommend that you trade-in your car after only three months due to the cost implications, there are situations when it would make sense. Trading in your car could be a smart decision if your car has high ownership costs. If you are spending a lot of money on gas, repairs and specialty parts, it could be a good idea to trade in your vehicle. We recommend that you choose an affordable car to help you pay the rollover quickly.

How To Trade In A Car After 3 Months?

You should maximize the amount you can earn from your trade-in to help you pay off as much loan as possible, which is high after only three months. The steps that you should take to trade in your car after only three months include:

  • Research the trade-in value – The biggest mistake you can make when trading in your car is walking into a dealership without knowing how much your car is worth. Knowing the value of your car helps you negotiate a better trade-in price with your dealer. You can take advantage of car valuation websites like Kelley Blue Book and Edmunds to find the market price of your car based on the make, model, condition and mileage.
  • Find out the amount you owe – Since you are likely to have negative equity at only three months, you must know how much the loan balance is before negotiating for a trade-in price. We recommend that you treat the loan balance as a different entity during your negotiations for a better deal. Some dealerships may trick you into thinking that they have waived your balance but include it in your new loan. Keep in mind that a loan rollover will increase your monthly payments and make you more upside down.
  • Get estimates from several dealers – You do not have to deal with your dealership. We advise that you get multiple estimates from several dealerships that sell your car’s make and model for a better return on your investment. Always pay close attention to the fine print to find what the dealer guarantees. Some car lots may be willing to offer incentives that you can use to purchase your new car. Ask the dealer for a breakdown of costs to help you determine what is included in your new loan offer.
  • Negotiate – The trade-in estimates you get are usually not the final possible figure. Dealerships will always start with a lower amount to help increase their profits. You should counter-offer with a higher trade-in value and negotiate until you get a good offer. However, you should keep an eye on dealerships that will mark up the price of your new car to make up for the trade-in discount they gave you.
  • Close the deal – Once you are happy with the dealer’s offer, it is time you close the deal. If you are buying a new car from the same dealer, make sure every detail is clearly indicated on your contract as that is what will matter at the lease end. Look out for enticing salesperson words not included in the contract and request them to put the information in writing. Review every detail of your contract, including the penalties and limitations that come with your new loan. Put pen to paper once you are satisfied with the deal.

How To Maximize Your Car’s Trade-In Value After Only 3 Months

  1. Delay the trade-in – Once you find out the loan balance, you can go ahead and trade-in your car or delay the transaction. Unless it is an emergency, we recommend that you delay the trade-in by a few months until you break even. Making some additional principal-only payments above your monthly amount can help you reduce the negative equity quicker.
  2. Pay off the negative equity – You can use your savings to pay off the loan balance. This method is the best for a quick solution, but it requires you to have substantial savings. It allows you to get rid of your car immediately without the additional interest cost that occurs when you roll overall over the balance.
  3. Sell your car privately – You should not only consider trading your car at a dealership. Although a dealership trade offers a quick way out of your lease, selling to a private party offers better returns. Your dealer will give you the wholesale value of your car, which is lower than the market price. Ask your friends and relatives whether they would like to take over your lease. You may also use lease trading websites like swapalease or leasetrader to find people willing to take over your lease. Giving incentives can help you attract more potential buyers for a quick deal.


There is no single answer for can I trade in my car after 3 months as it depends on the contributing factors. While your lease contract can make it possible to trade in your car after three months, the financial implications can make pursuing the trade less worth it. High depreciation costs and early termination fees can make your trade more expensive.

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