my son who is tall does not fit on a 12"(actually found it impossible to get him to go more than 30ft on a 12", he was so uncomfortable)... go to a BBS, and see which wheel size in your price range he can sit on and pedal (and always, wants to ride) I would look at the 16" first these are the second size up ones which usually have training wheels included, but would not go past 18" a 20" is a big bike and mosts kid will not be up for any kind of hills for a while on a bike that size, that will definitely limit participation around here. my son is around 37" tall (also 3) and 50lbs and the 16" fit great at a lower seat height. the general breakdown is a 16" is generally considered 5-8 y/o range if that helps any. as far as it being outgrown, it will be, period, and for kids that are tall, within 2 years, so I wouldn't spend a fortune on it.