Getting the best deal on a new car

For most of us, a car is one of the biggest purchases we’ll ever make after a house so it’s naturally something you want to get right. It can be easy to get overwhelmed by the thousands of models on offer and various pieces of advice from expert salespeople. Consider these steps to ensure you make a smart buy that is both great on the road and easy on your pocket.

Step 1: What’s the right model for your needs?

When defining your needs, think with your head not your heart. Make a list of what you really need, not want. For example, if you commute great distances, you have to prioritise fuel efficiency over speed or good looks. If have a very busy, taxing job, you will regret a car that needs a lot of maintenance. If you have a growing family, that boot space is going to become all important. Research various different models and compare the cost of services and parts. Something as simple as an oil filter for an exotic model of car can cost three times more than that of mainstream model of car.

Furthermore, be strict with your budget and remember to think beyond your monthly repayment amount – be sure to budget for running costs too. A well-known tip to calculate those extra costs: if your car payment is R6 000/m, budget for another R6 000/m for fuel. Always aim for the newest car with the lowest mileage possible for your budget

Step 2: Know your prices and negotiate the best deal

It’s important to take your time to research sales prices before setting your heart on a specific car. Visit a few second-hand car dealerships and request written estimates to use as bargaining tools later. You could also visit websites such as carfind.co.za.

Once you are confident that you know how much you should be paying, start shopping around. Some say that dealerships are more likely to shift stock towards the end of the month or calendar year, or whenever their financial year-end is. That’s because salespeople are eager to discount at these times in order to hit their targets or to clear old stock to make way for new models. Never be afraid to negotiate – or walk away

Step 3: Be smart about financing your car

The first prize when buying a car is always to do so in cash but very few people can afford that luxury. That’s why it’s important to look for a loan with the shortest term and the lowest interest rate possible. Even if the monthly repayment seems higher, you will save on interest in the long run.

Try to put down as big down payment as possible – ideally 10 to 20% of the total purchase price – and pay for any upgrades or additional warranties in cash rather than financing those too

Step 4: Get the most cash for your old car

If you’ve kept your existing car in a good condition – keeping up with its maintenance and services – it shouldn’t be too hard to sell it at a good price. Make sure you know how much it’s worth by doing your research online or discussing a trade-in with a reputable dealer. If you do decide to go the trade-in route, always ‘bank’ your deal – in other words, finalise the price of your old car before discussing the new purchase you wish to make.

Errors and omissions excepted (E&OE)