Change transmission fluid every 50,000 miles or per manufacturer's recommendation, unless you have a new vehicle that is filled with Dexron III ATF, which is supposed to be good for 100,000 miles.

Why ATF Wears Out?

An automatic transmission creates a lot of internal heat through friction: the friction of the fluid churning inside the torque converter, friction created when the clutch plates engage, and the normal friction created by gears and bearings carrying their loads. At elevated operating temperatures, ATF oxidizes, turns brown and takes on a smell like burnt toast. As heat destroys the fluid's lubricating qualities and friction characteristics, varnish begins to form on internal parts (such as the valve body) which interferes with the operation of the transmission. If the temperature gets above 250 degrees F., rubber seals begin to harden, which leads to leaks and pressure losses. At higher temperatures the transmission begins to slip, which only aggravates overheating even more. Eventually the clutches burn out and the transmission calls it quits. The only way to repair the damage now is with an overhaul - a job which can easily run upwards of $1500 on a late model front-wheel drive car or minivan.