Buy now, save later

With many car makers increasing their prices Ford and Kia the latest you might think that now's not the time to buy a new car. However, we think it could be the perfect time. Read on to find out why.

What Car?'s mystery shoppers report there are many great deals to be had right now, but that they could also soon disappear if you're not quick.

Here's why:
1) When the credit crunch started to bite, supply outstripped demand, so discounts increased as manufacturers tried to shift stock. Now, as car factories cut production, all that extra stock is dwindling.

2) Car dealers are coping with the economic downturn in two different ways. Some accept that they'll sell fewer cars, so they will protect profits by not increasing discounts on the cars they do sell.

However, others are more willing to slash profits on each they sell, because they believe they'll recoup profits by selling a lot more vehicles.

3) If people aren't buying new cars, then they're not trading-in their current vehicles, either. The result is a shortage of good-quality used stock on forecourts. This means your part-ex vehicle could be worth more to a dealer now, while stock is limited, but far less in the months to come when more used cars enter the market.

So why should you buy now?
If the economy starts to pick up and Fiat's boss Sergio Marchionne said today that he expects the European car market to start growing by the end of the year the following could happen:

1) Demand will outstrip supply when the excess stock is used up. As a result, discounts will start to shrink.

2) Car dealers who are currently offering big discounts will try to claw back the profits at a later date by offering much smaller concessions.

So, buying a new car sooner rather than later could save you thousands of pounds. Right? Well, not quite there's one more variable to put into the equation.

The Government is under increasing pressure to launch a scrappage scheme to stimulate new car sales. This would mean car owners could get a 2000 incentive on top of any discount they can negotiate on a new car.

If the Government does opt for a scrappage scheme, the Chancellor would probably announce it in his Budget on April 22.

So our advice for getting a great deal?
Here's out four-step guide to buying a new car and saving thousands of pounds.

1) Check if your dealer has access to the excess stock held by certain car makers. Be flexible on the spec and colour of the car and you could save thousands.

2) Dealers are unwilling to offer big discounts on small, economical cars because sales of these vehicles are up. If you are after something bigger, you can haggle hard and secure huge discounts.

3) Shop around. If one dealer won't shift on price, you can be sure another will. Print off quotes from internet car brokers and use them as bargaining tools. Use our Target Price as a guide to the most you should pay for your new car.