Hi Anjili - I replace my car every 3 years. I run a lease that expires at the end of 3 years and it has a final balloon payment. When I quit the car anything that I get over and above the final payment is mine - tax free! I generally like the feel and smell of a new car so I'm keen to replace them once they generally come out of warranty and to maximise the value. That way I don't have huge repair costs and less chance of a breakdown.
Another reason is that my cars generally have under 50,000 kms on the clock - this helps to maximise the trade in value.
For my wife's car we pay it off over 5 years and then sell it. It will have under 10,000 kms on the clock (she doesn't drive far) and we either use the value to off set the trade in or go on a holiday and do it all over again!