One of the most frequently asked questions about buying a new car is "When is the best time to purchase?" Lucky for you, NOW is the best time. Most people are on holiday, recovering from Christmas shopping and not in the mood to buy a car.

Dealerships are trying to hit their end-of-month AND end-of-year sales goals. And on top of all this, overall car sales are the worst they've been in over 15 years. Dealers are desperate to sell, it's a perfect storm in favor of car buyers.

If you're ready to buy a new car, we recommend shooting for a Monday or Tuesday date of purchase (these are usually the slowest days for dealerships). That means Dec. 29th and 30th.

Follow our step-by-step guide to get the lowest possible price

For those thinking of purchasing a GM, Ford, or Chrysler brand car, you may be wondering what happens if these companies go out of business after you purchase their car.

Worse case scenario: Your warranty will become void, it'll be harder to service your car, and the value of your car may go down.

The good news is these companies don't look like they'll go out of business in the short-term. The government has agreed to a bailout, throwing a much needed lifeline.

However, there are still some risks for buyers, especially Saturn, Hummer, and Saab. GM wants to get rid of these brands.

If that happens, you'll still be able to get warranty work done as long as the parent company is still in business. But keep in mind that when British automaker MG Rover went out of business a few years ago, all warranty claims went unpaid.

When fuel prices were going through the roof this past summer, Honda had the claim of top selling vehicle - the Civic. Now that fuel prices have dropped by over 50%, sales have plummeted.

Honda dealers couldn't keep Civics on the lot back then and ordered far more than they can now sell. Inventories have piled up making now a great time to buy Honda.

They will be cutting production this month which will probably result in supply leveling off with demand by about March 2009. So between now and March, prepare to get great deals on Hondas, especially the Civic.

Chrysler is offering dealers an extra $2,000 in incentives if they buy one of 12,000 unassigned vehicles. Unassigned vehicles are basically overstock resulting from cars which were originally ordered but cancelled, usually by dealers who went out of business.

They have 12,000 of these cars to get rid of. What this means to you is if you're in the market to buy a Chrysler, you might get lucky and find a dealer willing to pass the incentive along to you. We can't guarantee your local Chrysler dealer will have one of these unassigned vehicles on their lot (they certainly won't tell you).

The best way to get this extra incentive into your pocket is to use our car buying method. If there's a dealer in your area willing to pass on the incentive, you'll find it this way:

Toyota is on track to becoming the best selling brand in America for 2008, beating Ford and Chevrolet for the first time in history. But inventory is high at the moment and dealers will be ordering far fewer cars from the manufacturer in 2009.

Toyota dealers contribute $250 towards regional advertising for each car they order from the factory. Since they'll be ordering about half what they normally do, this means consumers will see a lot fewer Toyota commercials.

As the saying goes, out of sight, out of mind. With consumers getting less advertising, dealers will get less foot traffic. Toyota sales may take a bigger dive in 2009 than other comparable brands, which is good news for you. Look for great deals in the first couple of months of 2009.

Good news for those of you looking to buy a Volvo. The company has reinstated free maintenance for all 2009 vehicles, covering the first 3 years or 36,000 miles. This will make the cost of owning a Volvo a little bit less. If you've been sitting on the fence, now is a good time to buy.

---

Car Buying Report Archives:

• Apr 01, 2009 - GM and Ford Offer Job Loss Incentive...

• Mar 18, 2009 - Imports Finally Join the Incentive Bandwagon...

• Mar 11, 2009 - Plenty of 2008 Models Still Not Sold...

• Mar 04, 2009 - New Tax Credit for Plug-In Cars, February 2009 Sales a Disaster...

• Feb 25, 2009 - Hyundai Offers Assurance Plus, Saab Files for Bankruptcy...

• Feb 18, 2009 - 2009 Car Tax Credit Not as Good as First Hoped...

• Feb 11, 2009 - Tax Credit for Car Buyers in 2009, Rebates up over 12%...

• Feb 04, 2009 - Car Sales Worst in 27 Years, GM May Shut Down Hummer, Saab, and Saturn...

• Jan 28, 2009 - Chrysler Getting Desperate, Great Deals on Small Cars...

• Jan 21, 2009 - Unsold Cars Piling Up, Toyota Offers Cash Rebates...

• Jan 02, 2009 - GM Offers 0% Financing, 2009 Sales Will be Horrible...

• Dec 26, 2008 - Best Time to Buy a Car, Chrysler Offers Deals on Overstock...

Incentives Watch:

• Best Car Deals for July 2009