The recession is taking its toll on the car market. Latest figures revealed the number of new cars registered in January was 31% lower than in January last year and Nissan has announced 20,000 job cuts worldwide with its chief executive having described the global auto industry as being 'in turmoil'.
As far as motorists are concerned, this cloud has a silver lining because if you are looking to buy a car - whether brand new or second hand - there are some great deals to be had.Here are our top 10 tips on how to negotiate the best deal:
Do your homework
Once you've decided which car you want to buy, do some research online so that when you go into the dealership or speak to the vendor you are in a strong position to haggle. Look to see if there are any similar vehicles for sale elsewhere and see how the prices compare. Even if you are buying a brand new car, the dealer will have room for manoeuvre on the price.
Decide how much you want to pay
Remember there is always room for negotiation when it comes to car prices, especially in the current climate, so decide how much you are prepared to pay for the vehicle (but be realistic) and stick to your guns. Be prepared to walk away though if this price isn't agreed - with a bit of luck you'll get a phone call from the seller or dealer agreeing to your terms.
Use the internet to your advantage
As with many consumer goods, you can often find the best deals on new and used cars by shopping online. With fewer overheads and no commission to pay to salesmen, there can be extensive reductions in price if you pick up a car through an online dealer. However, even if you don't buy outright on the internet, print off some quotes and take them into a local dealership with you - you could even ask a dealer to match the internet price. This is even more effective for used cars - if sellers think you are looking at other options they will be more willing to negotiate.
Try and uncover the invoice price
The invoice price is the amount the dealer paid to the manufacturer for the vehicle and it should be your target to get as close to this as possible - the dealer will obviously expect to make some profit. Some car buying websites will list their invoice price so if you can point this out to a dealer you stand a better chance of lowering the retail price. Similarly, look for information on manufacturer rebates as some companies offer cash incentives to dealers to promote certain vehicles.
Buy at the right time
If you're not too worried about having a 2009 registration plate, then try and time your purchase well. Many dealerships look to shift excess stock ahead of the introduction of new registration plates in March and September so now could be a great time to pick up a bargain. If you're not quite ready to make a purchase, then consider holding off until August as the '59' registration is launched in September. In terms of used cars, keep track of how long they have been on the market - most websites will carry a 'date posted' mark on used car advertisements - so you get an idea of how eager the seller is for a deal.
Let them know you're serious
Dealers will work a lot harder if they think they're going to get a deal so let them know you're there to buy a car if the deal is right. However, don't come across as desperate to buy as this could reduce your chances of picking up a bargain - play it cool.
Take a test-drive with a knowledgeable friend
Just as you wouldn't buy a pair of shoes without trying them on first, you shouldn't buy a new car without taking it for a spin. If you're buying a used car it's definitely worth taking someone along with you who knows a thing or two about cars and can point out any unusual sounds or movements. Even if the problems are nothing to be concerned about it could help you when haggling for a better deal. It's also worth checking the vehicle has a clean history - vehicle checks are available online for as little as £3.95.
Get the most for your current vehicle
If you have a car to sell, work to get the best price for it. Trading it in as a part exchange on your new vehicle is the easiest option, but make sure the sales adviser contacts a number of dealers for bids on it so you get the best deal possible. However, if you sell it privately, you'll probably get even more for it.
Shop around for car finance
When talking at a dealership you should only negotiate on the sales price - don't be lured in by attractive finance offers. Dealers often bamboozle prospective buyers with figures and they know how to make a car deal sound tantalizingly good, but don't just focus on the monthly repayments. Find out how much the finance package will cost over the term of the deal. And how flexible is it? For example, what happens if you want to get rid of the car before the end on the term.
Once you are armed with all the answers, compare the cost of the dealer's finance package with that of a standard personal loan. Use our car loans comparison tool to see what you could get from a traditional provider.
Shop around for extras
Many dealers throw in incentives such as car insurance and breakdown cover. On occasions their deals for these products can be attractive - several dealers even offer a year's free car insurance with some purchases. However, you should check that the cover is adequate and ask to see examples of repayment plans without these extras. You could potentially save a significant sum of money if you shop for car insurance and breakdown cover independently.
GENERAL ADVICE WHEN INSPECTING VEHICLES
Check the engine plate on the car corresponds with that given on the registration documents and that it has not been tampered with or changed.
Never buy a car without test driving is yourself. First make sure you are insured to drive it then, if possible, take it on a drive that covers a mixture of conditions i.e. fast motorway driving, slow urban driving, twisting roads and don't forget to check reverse.
BODYWORK
Always inspect the bodywork in good light.
Look for corrosion or rust. Rust is probably the most damaging thing of all on cars over five years old. Surface blisters can be relatively harmless and easily treated but corrosion coming from the inside of the body panels is more serious.
Look for rust at the top and rear of the front wings, along the side sills, below front and rear bumpers and the bottoms of the doors.
Sometimes a rust blemish on the paintwork can indicate more serious corrosion underneath. Press the panel gently with your thumb. If there is a cracking noise it indicates advanced corrosion.
It is usually not worth repairing rust that has perforated the bottom of doors, the bodywork around the front and rear screen rubbers, on trailing edges of bootlids or tailgates and leading edges of bonnets and on rear wing panels. These can only be repaired expensively by specialists and subsequent painting is costly.
Walk around the car and look along the doors and wings from each of the four corners. Any crash repairs will show up if they have not been well done. You will see ripples or a change in the texture of the paint if there is a lot of body filler underneath. Take a small magnet with you, it will be attracted to metal but not to plastic body filler. Look also for variations in the paint colour.
Water stains in the boot, around windows, on carpets and around the sunroof opening may indicate leaks.
STRUCTURAL BODYWORK
Look for rust perforation on inner wings, the bulkhead and any cross members and chassis members visible under the bonnet. If you see any, reject the car.
Beneath the car check side sills, chassis legs, cross members and subframes. Tap suspicious areas with a lightweight hammer, or push hard with your hand to detect the 'give' of weakened metal. Be wary of freshly applied underseal - could be hiding weakened metal.
Check the floorpan for corrosion.
Look at brake pipes, if they are crusted or pitted with rust, these could be dangerous.
Check suspension and steering mounting points for serious corrosion, especially under the bonnet.
COLLISION DAMAGE
A car that has been in a collision can be dangerous, especially if its suspension and/or steering have been damaged. Examine under the bonnet for damage, creasing or replaced inner wings (unsightly welds are a give-away). Also inspect the engine bay forward panels and forward chassis legs for repairs or creases.
When test driving the car the steering should be consistent with no tendency to pull either left or right.
Look under the carpet between the front and back doors for signs of welding or repair in case two halves of different cars have been welded together (cut and shut), which is extremely dangerous.
INSIDE THE CAR
Check the odometer, if the numbers are out of line the mileage may have been altered.
Look to see if the mileage corresponds with the general condition of the car. A worn brake pedal and wear marks on the gear lever indicate a car that might have done more than 60,000 miles. A worn or sagging driver's seat and carpet are other signs of high mileage.
A very low mileage may indicate the car might have been left unused for long periods or used only for short journeys. Both can cause engine problems. A car that has been regularly used and serviced is a better bet.
ENGINE
Have a look at the general state of the engine. A dirty engine and surrounding area suggests that the car hasn't been well looked after and that servicing may have been neglected. Conversely, a sparkling clean engine could have been steam cleaned to disguise problems such as oil leaks etc.
Before starting the engine remove the dipstick and check the colour of the oil. If it is very black the car has probably not been recently, or regularly, serviced. Also check for beige "mayonnaise" on the dipstick, a possible symptom of head gasket leakage.
Check the quantity and colour of coolant. It should be the colour of antifreeze not rusty red. An engine that has been run without antifreeze may have problems.
Listen to the engine starting up from cold. The oil light should go out soon after the engine starts, if it doesn't there may be engine wear.
Heavy rattling or knocking noises shortly after start up could indicate wear of the crankshaft and big-end bearings. Listen for clattering or light knocking noises from the top of the engine which indicate camshaft wear.
Turn on the ignition and open the throttle sharply. Check for black or blue smoke from the exhaust. Blue smoke comes from burning oil and shows engine wear, whereas black smoke is un-burnt fuel and has many possible causes. Check for smooth idling when warm.
When test driving check the engine does not misfire but pulls strongly and cleanly. Check there are no pinking sounds (i.e. metallic rattling sound that occurs when the throttle is open). If the car does misfire and the engine has electronic fuel or ignition control only buy it if the misfire is put right first.
Keep an eye on the temperature gauge or warning light which may indicate overheating.
Finally check for oil leaks.
TRANSMISSION
If the car has a manual gearbox, check the clutch operates smoothly and all gears engage easily. If the gear change stiffens as revs increase the clutch may be worn. Check for clutch slip by driving the car up a hill in top gear.
When driving change down into each gear from a higher speed than normal to test the synchromesh. If the gears baulk or crunch, or if the gearbox whines excessively, gearbox overhaul or replacement are the only solutions.
If the car has automatic transmission check the transmission dipstick for correct fluid level, this is best done with the engine hot and idling. Also smell the dipstick, if it smells burnt steer clear of the car!
When driving check that the transmission changes down into each gear properly under full acceleration and at the right time.
SUSPENSION
Check shock absorbers (dampers) by pushing down hard on the bodywork at the corners and letting go. The car should rebound once just past the level position, then go back i.e. one and a half swings. Any more than this indicates the shock absorbers need replacing.
Listen for knocks from the suspension over poor road surfaces which could indicate worn bushes, joint and dampers. Take a note of the cars handling, if it is vague, "floaty" or bouncy, suspect worn dampers.
Check for fluid leakage from the dampers or struts. Slight weeping is acceptable any more is not.
STEERING
If the steering is vague and heavy the tyres may be worn or under pressurised.
Rock the steering wheel gently while watching the front wheel, there should not be any noticeable delay between steering wheel and road wheel movement. Free play accompanied by a knock will fail the MOT test.
Check for wheel wobble at speed. This is often attributable to unbalanced front wheels. Steering wheel shimmy at low speeds indicated distorted wheel rims.
BRAKES
The brake pedal should offer good resistance and not sink most of the way to the floor when applied.
If a servo is fitted, check that it works by pumping the brake pedal several times, holding the pedal down and starting the engine. You should feel the pedal creep down as it operates.
The care should not swerve when the brakes are applied hard at speed. If it does, it may have seized or leaking wheel cylinders or calipers.
If the car judders when you apply the brakes this implies distorted front brake discs. Inspect discs for heavy scoring or unpolished or corroded areas, they may need renewing.
Check the brake hoses under the wheel arches for cracking, chafing, swelling or leaks.
TYRES
Check the treads and side walls on all four tyres (plus spare wheel) there should be more than 2mm of tread all over the tyre (I think the legal limit is 1.6mm in the U.K. at present) and the sidewalls should not be cracked or damaged. Uneven wear on treads suggests steering, tracking or suspension problems.