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There seem to be lots of good reasons to buy that new car at the moment - trade-in assistance, guaranteed buybacks, balloon payments, low interest rates...

But how big a role should any of these factors play in your decision?

Bruce Whitfield gets valuable pointers from Warren Ingram, personal financial adviser and executive director of Galileo Capital.

RELATED: 'Used car prices are plummeting. Sellers are desperate and willing to negotiate'

One key piece of advice: Always try to buy secondhand or at least older demo cars.

And when it comes to financing, even if you take a low interest rate deal, ensure that you pay a big deposit.

RELATED: Best 2nd-hand car to buy for less than R80 000

Ingram admits that's he's just taken on a financing deal himself to buy a car, but at a rate below inflation.

The calculation I do in my head... is can I do better with that money without taking excessive risk over the same time frame because if I can, then I should keep that money and invest it. But if I can't... then I should definitely pay off the car with cash.

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

I'm fairly confident in my ability to do a bit better than 1.5% a year over the next few years, and that was the reason for financing the car.

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

Having said that, I didn't do any of the other fancy stuff that these car companies offer... I definitely didn't take a new car... I definitely didn't do balloon payments or any of those things where they give me payment holidays or guaranteed value...

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

He says those options create a false sense that the buyer is getting a car relatively cheaply, while in fact they'd be overpaying.

Listen to Ingram's money-saving advice in the audio below:

This article first appeared on 702 : 'Don't overspend on a car purchase - smaller and cheaper equals better value!'

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