A wobble instability is one of the major problems of a three-wheeled vehicle commonly used in India, and these instabilities are of great interest to industry and academia. In this paper, we studied this instability using a multi-body dynamic model and with experiments conducted on a prototype three-wheeled vehicle on a test track. The multi-body dynamic model of a three-wheeled vehicle is developed using the commercial software ADAMS/Car. In an initial model, all components including main structures such as the frame, the steering column and the rear forks are assumed to be rigid bodies. A linear eigenvalue analysis, which is carried out at different speeds, reveals a mode that has predominantly a steering oscillation, also called a wobble mode, with a frequency of around 5–6 Hz. The analysis results shows that the damping of this mode is low but positive up to the maximum speed of the three-wheeled vehicle. However, the experimental study shows that the mode is unstable at speeds below 8.33 m/s. To predict and study this instability in detail, a more refined model of the three-wheeled vehicle, with flexibilities of three important bodies, was constructed in ADAMS/Car. With flexible bodies, three modes of a steering oscillation were observed. Two of these are well damped and the other is lightly damped with negative damping at lower speeds. Simulation results with flexibility incorporated show a good match with the instability observed in the experimental studies. Further, we investigated the effect of each flexible body and found that the flexibility of the steering column is the major contributor for wobble instability and is similar to the wheel shimmy problem in aircraft.