The best time to trade in a car for a new one is after the vehicle is several years old, when the year over year depreciation stops increasing dramatically each year. New vehicles depreciate dramatically in the first years of their life, though this gradually slows as the car ages.
One of the best things to do before a trade-in ever occurs is to purchase a vehicle that is already used and is a few years old. This ensures that the vehicle has already depreciated most of its value, and it can be driven for several more years without depreciating much more before it is traded in. This strategy minimizes the amount of money spent on a car and maximizes the trade-in value.