New or used car?
Yes, the smell of fresh leather is always appealing but new cars have a sting in their tail. The moment you drive your new car off the showroom floor you can say goodbye to at least 20% of its value. All cars depreciate in value, even the high ticket German and Italian jobs take a bath on resale values, so don't let some smooth-talking sales person tell you anything different.

Cars lose so much of their value because dealerships have to make a profit. So, if you take your R140 000 2007 Ford with 5 000km on the clock to a dealer to trade it in for a bigger car, the dealer will in all likelihood offer you between R110 000 and R115 000 for it. He will then sell it to someone else for R125 000. So if you can swallow your pride and buy a newish second-hand car you will get a better deal. Better still, look around for a private sale and save even more, just make sure you get the car checked out by the AA and the seller checked out by confirming his or her employment and address.

Negotiating with the dealer
Your first task is to establish a fair purchase price; this task will require a little homework. Get a copy of the Junk Mail and the Auto Trader and see what the dealers are asking for the vehicle. Then compare those prices to what private sellers are asking. The benefit of buying a vehicle through a dealer (although this is not always the case) is if anything drastic should go wrong with the car early on, the dealer will have an obligation to help you.

When you approach the salesperson you should not let him or her know your financing or requirements because they may try to price the car so as to hit that limit. If they ask about your financing simply say that financing isn't a problem. Should the dealer learn that you are desperate for a lease or a loan, your bargaining power will be severely damaged, and you will overpay for the car. Should you fail to first negotiate a set price, the dealer will sell you "affordable" monthly payments that will continue far longer than they should.

The first stage is to ask the sales person for the price and then compare it to the other prices you have seen for cars with the same year and mileage, and in a similar condition.

Now you need to hone your negotiating skills. If you don't like quibbling over price face to face there are other ways to achieve the same result. But no matter how you decide to negotiate, never feel you must commit to a deal if you're uncomfortable. Walk away and give yourself time to think, free of any pressure. In fact, walking away from a deal can be a powerful way to get better terms.

Negotiating by phone is much easier than sitting through an hour of sales hype. Call the salesperson back and say that you have weighed up the options and you have decided that you are only willing to pay R80 000 for the car based on other vehicles you have seen. Before he responds say, "If that's okay, I can be there in a half hour with the deposit". They'll either say yes, no, or make a counter offer.

Even before you walk into a showroom you can send the dealers in your area a fax. Get the name of the sales manager and fax a description of the car model you want, and ask that they respond with their best price quote. Once you have the quotes, see if someone is willing to go lower than the lowest quote. This can be an especially effective approach if you hate face-to-face negotiations or otherwise worry that you won't get the best available price.

Finally, once you have secured the best price, ensure that the car is in good condition. Always have the car checked out at the AA – R500 is a small price to pay for peace of mind.

Do you have any useful tips to consider when buying a car? Share them in the comment box below.