SHORT TERM OWNERSHIP/LEASE 2-3 YEARS
Options for those who trade every two-three years
For those who trade frequently it can be expensive. Negative equity is the biggest challenge. You're typically playing catch up to your payoff as the car depreciates. Despite leases having conflicted opinions, it can be a great option for those who drive less, maintain their vehicles, and trade every two-three years.
For financing you will consider term, rate, and down payment as the main drivers in your ability to trade within a couple years.
Brand and residual or rate of depreciation play a huge role in this. Some brands are known to hold their value better than others. A brand that holds it's value better than another will likely result in a lower lease payment, or better trade value.
MID-TERM OWNERSHIP 3-5 YEARS
Most people probably fit in this category
Depending on the initial terms of your loan or lease you may be in a position to trade without negative equity. If you had a shorter term loan that means you have paid off your loan faster, and probably with a lower interest rate.
Chances are you will remain within powertrain warranty on most brands meaning items like engine or transmission are covered. You're likely to be on your own for items outside of the 3 year/36,000 mile bumper to bumper warranty offered by most manufacturers.'.
Regular service is recommended to keep your factory warranty intact. If you miss recommended service intervals it is possible that a claim may be denied in the future.
LONG TERM OWNERSHIP
If you enjoy watching the odometer
If you're one that likes watching the odometer turn chances are your car is paid off, and I would have no chance of trading you out of it! There's something about what is tried and true, and especially with no payment. Should you reach the point to replace it, take your time and gather information. Chances are you'll keep the new one just as long.