I wouldn't want to risk losing a gun as nice as the Mustang. I don't have a KT .40, but I do have a P3AT and a PF9. I carry the 380 in my pocket if I'm wearing pants. Sometimes I carry the 9 instead. Both are dependable, light, and easy to conceal. You might be able to buy one of each for the value of your Colt. If one of them were lost, you wouldn't have such a loss.
The PF9 is about the same size as your Colt and would probably fit your style quite well. It would also give a bit more power as well.
$250 for the .40 sounds ok. I agree that you can probably resell it for what you paid without any trouble if you don't like it.