When it comes to buying a car, even the most sensible and organized people can go into a complete panic. They make stupid decisions and ignore their instincts because they are suddenly put under pressure in an uncomfortable environment.

The complete guide to getting a great deal on buying a car would fill a whole book. But since you’re probably here looking for immediate answers and advice on buying your next car, here are Ten Golden Rules for buying a new or used car.

There’s nothing in here that is complicated or difficult, and we will show you how anyone can get a great deal on a car. You don’t have to know anything about cars or car finance, you just have to trust your own judgment and ask questions whenever you don’t understand something.

Follow our golden rules and you are far more likely to end up with a decent car – and get a decent deal on it, too.

Golden Rule 1. Don’t sign anything unless you are 100% committed to buying the car

Signing a form indicates you are committing to what that form says. In a car showroom, signing a form generally means you’re agreeing to buy a car – and it’s usually a legally-binding commitment.

You don’t need to sign anything for a quote, whether it’s a price for the car or a quotation on car finance. Any car dealer telling you that you need to sign something “to hold the price until you make up your mind” is lying. You don’t need to do that. You are probably signing a contract to buy a car.

You may have to sign a test drive form to make sure you are covered for insurance purposes, but you don’t have to sign a vehicle order. If a dealer won’t let you test drive a car without signing an order “subject to a satisfactory test drive” beforehand, walk away.

If you’re not 100% sure that this car is the one you want, or whether your significant other will like it, or if you haven’t got an insurance quote yet, or if you’re not sure it will fit in the garage, or for any other reason at all, don’t sign the form.

Do your homework first and make sure you have all your ducks lined up in a row before committing yourself. Don’t be pressured into signing anything (see Golden Rule 4 and Golden Rule 9) by anyone. Only sign when you are good and ready.

Once you sign a contract to buy a car in a car showroom, you have legally committed yourself to it and you can be held to it.

Changing your mind after you sign on the dotted line is much harder than beforehand, and usually much more expensive.

Golden Rule 2. Never give a car dealer money unless you’re 100% committed to buying the car

Giving a car dealer a deposit is basically the same as signing an order form – you are saying “I agree to buy this car”. Again, you don’t need to pay a deposit for a test drive, a quote or anything else.

It’s common sense, and no different from any other retail store – if you are paying money for it, you’ve bought it.

You should only need to pay a deposit on a car once you have signed an order form (contract) to purchase it.  Handing over money without a contract will usually end in tears.

If you have to pay money over the phone to secure a car, get an email confirmation immediately, and a proper receipt in the post that day (see Golden Rule 8).

Whenever you give a car dealer any money, make sure you get a proper receipt. Make sure the receipt specifically states what the payment is for (eg – “deposit for purchase of Ford Fiesta, reg. AB18 CDE”).

If you end up paying a different amount to what is shown on the contract (it can happen, for a number of reasons), get the contract re-written to match what you have actually paid. No exceptions.

Golden Rule 3. Read and understand everything before you sign anything

As explained in Golden Rule 1, signing a contract means you are legally committing yourself to everything it states. Yet a huge number of car buyers do not read the contracts for cars or car finance before signing. Or they don’t understand exactly what something means, but sign anyway because they’re too embarrassed to ask.

All contracts have terms and conditions, which may have implications for your ownership of the car, and you are legally bound to them once you sign the contract. So if you are not sure what you are getting yourself into, don’t sign.

Ask questions – as many as you like. If you don’t understand the answer, ask again. Ask someone else to explain it. If you’re not happy with the answers, walk away and get some answers elsewhere, even if you just need reassurance that you’re not being stupid.

It’s not uncommon for the purchase contract for a car to look different to the quotation you were given, or from what was originally advertised.

Compare them closely, and if there’s anything that doesn’t match, ask why. It may be an error, or the dealer may be trying to sneak something past you without you noticing. Is the finance rate still the same as what was originally quoted, or has that mysteriously gone up?

Golden Rule 4. Car dealers can only take advantage of you if you let them

You may have heard of the original ‘Golden Rule’ – whoever who has the gold makes the rules. It is amazing how many people forget this as soon as they walk into a car showroom, and immediately capitulate to everything the car salesman wants them to do.

The car sales process is cleverly designed to extract the maximum amount of money from your wallet as possible. You are led along a very specific path, ultimately arriving at the destination of buying the car that suits the dealer best (see Golden Rule 5), using their finance and with as many extras attached as they can fit into your stretched budget. But they can only do all this if you let them.

Turn the tables. Make them prove that their car is better by comparing it to others. Make them work harder to get your business by shopping around for a better deal.

Be polite and reasonable, but don’t be afraid to tell them if they are not doing a good enough job at earning your money. Walk away and find a dealer who will treat you and your wallet with more respect.

If they don’t listen to what you are asking for, don’t accept it. Make them show you a car which meets all of your needs, not the one that they really want to sell but don’t really suit you. If they don’t have a car that suits, go elsewhere.

Basically, don’t take any crap and don’t give them your money unless they have genuinely earned it. They’re all paid on a commission basis, so you are personally paying them to sell you a car.

Golden Rule 5. A car dealer will try to sell you the car THEY want you to buy, not the car YOU want

Car companies usually have a large range of models, each with several different engine, gearbox and trim choices, plus a huge range of colors and options. There can be literally millions of potential combinations for any particular type of car. That means that the chances of a dealership having the exact specification that you would like – available and in stock – are usually fairly low.

Instead, dealers will stock a selection of cars, usually in the most popular colors, with more available “from our secure storage facility” (a field somewhere) or in stock at other dealerships, or of course you can order one directly from the factory to your exact preferences and simply wait for it to arrive.

However, the dealer doesn’t want you to order a car, or make them bring one in from elsewhere. They want you to buy the car right there in front of you, because that car is costing them money every day it sits there.

A car that they don’t have doesn’t cost them anything, so it’s in their interest to convince you to take that car right there, however they can. Whether it’s sweetening the deal on their showroom car, or scaring you off ordering a car with long waiting periods and a reduced part-exchange price, or any other method, they will always try and sell you the car they have now, regardless of whether it’s what you want.

Golden Rule 6. Understand your total financial commitments – now and over time

If you read through the various questions asked on the vehicle expert forums, or in the comments of any of the car finance articles, you’ll find countless people trying to find out how they can get out of their financial obligations.

It might be because their circumstances have changed, or they have changed their minds, or they have a new job in a different country, or so on.

Usually it’s problems affording the payments, and usually it can be traced back to a lack of thought or understanding of the long-term financial commitment of taking out car finance over four or five years. Plus buyers tend to forget that cars cost money to run – a recent study found that the average is $160/month, and that doesn’t include finance payments.

Just because you can afford the deposit and monthly payments to buy your ideal car right now, doesn’t mean you can comfortably keep up payments over 36-60 months. This is especially true if you are borrowing the maximum you can afford, leaving yourself nothing to spare if your life expenses start to increase.

If you fail to keep up your payments, the finance company can take your car (or get a court order to take it) and ruin your credit rating, making it impossible for you to get credit for years afterwards. Plus you’ll still have to pay any outstanding balance back, which you probably can’t afford because that’s how you got into that mess in the first place.

This rule is particularly important for younger car buyers. Plenty of young adults save up a deposit and can manage the monthly payments at the start of the term, because they’re living at home and have minimal expenses to cover. But soon they want to move

But soon they want to move out, and have to worry about mortgage payments, bills – you know, real life. Far too many sports cars have been auctioned off by finance companies after young and rash borrowers defaulted on the payments.

Golden Rule 7. Always test drive the same car you are planning to buy

It always amazes me how many people don’t want to test drive the car they are planning to spend many thousands of $$$$$ on. How are you going to know if the seats are uncomfortable, or that you find the rear visibility awkward for your seating position, if you don’t try the car to find out?

You don’t have to wring the car’s neck on a test drive, but you do need to make sure you’re comfortable and not put off by anything.

The most common excuse for not test driving a car is that people don’t feel comfortable. Driving an unfamiliar car on unfamiliar roads, with an unfamiliar person alongside them, can distract them from concentrating on their driving.

The solution to this is to ask the salesperson to find some quiet roads away from traffic, and to get the salesperson to sit in the back – or simply ask them to stay quiet so you can concentrate. They’re not going to be offended, and you will find out whether you can live with the car for the next few years.

Given that there are usually several different specifications available, make sure you are driving a car that is representative of what you want to buy.  Driving a diesel manual if you really want petrol automatic is of very little use whatsoever, regardless of what the salesperson might say.

Golden Rule 8. Get everything in writing

Whenever anyone at a car dealership offers you anything, promises anything, gives you a quotation or provides an explanation for anything, insist that they put it in writing, along with any conditions.

Car dealers are notorious for making sweeping promises that they subsequently fail to deliver on.

One of the most common is for the sales manager to offer a free annual service to make up for any problems during the sales process. Maybe the car was damaged in pre-delivery or there was a mistake in the order and you didn’t get your sunroof.

You can bet your life savings that when you turn up for your free service next year, the service department won’t know anything about it and the sales manager will have no recollection of making such a grand offer.

If you don’t have it in writing, it’s worthless.

The same rule applies to quotations. A salesperson might quote you $25000 as the total price for a particular car, but when you come back the next day to place your order it’s suddenly become $28,950.

When you query it, the salesperson can’t remember because he/she has been discussing half a dozen different cars with other customers since then, and your careful budget calculations have now gone out the window.

If you pay a dealer a deposit to secure a car, get a receipt that specifically notes that the payment is for a deposit for that car, including the registration number or VIN (chassis number).

If you are paying a deposit over the phone, request an immediate email confirmation and the receipt in the post that day.

If a dealer is offering or agreeing to anything as part of the negotiation of the sale, get it written into the contract. Both parties should initial each specific point as well as sign the contract.

Remember, a car dealer’s verbal promises are worth nothing. Some dealers will refuse to provide a written quotation for you to take away from the showroom (because they don’t want you take it to another dealer and ask them to beat it). If they won’t put it in writing, it’s not real. Walk away and do not accept such behavior (see Golden Rule 4).

Golden Rule 9. There’s always another car

Unless you are specifically looking for a very rare vehicle, always remember that the car you are looking at is simply one of many.

If you are not happy with the way you are being treated, or generally not 100% convinced on the car itself, walk away. There are more than two million new cars and six million used cars sold every year in the UK, so we’re not going to run out of cars anytime soon.

If you have spent time trying to negotiate a deal on a particular car and it’s not going the way that you want, it’s easy to forget that there may be plenty of other cars out there that will do exactly what you want and need, and potentially at a better price.

Similarly, never fall for the old sales spin that you are getting an amazing deal that’s never going to come around again. It’s usually complete rubbish.

If a dealer is happy to do that amazing deal for you, then it’s likely that they will offer the same deal to the very next person who wanders in with money.

Golden Rule 10. No car is perfect, and any car can go wrong at any time

It doesn’t matter what brand of car you buy, what length of warranty you have or how well the previous owner maintained it – cars can break down at any time, and it can be expensive when it happens. So don’t spend all your money buying the car, and then not have enough left for unexpected bills.

Of course, buying a brand new Honda is probably a better bet for reliability than an old Land Rover, but any car can get a punctured tire or have a headlight smashed by a stone.

If you leave the ignition on to listen to the radio while you’re waiting to pick up the kids, the battery could well go flat. It’s easy to accidentally put petrol in a diesel car if you’re daydreaming at the pump. Modern car keys contain electronics that are not waterproof if you drop them in the pool/bath/toilet.

Any of these things will cost you money (and inconvenience).

When budgeting how much cash to flash on your next car, or how much you can afford to pay each month, you absolutely must have enough leeway to cover unexpected costs. Cars are complicated machines, with sophisticated mechanical and electrical systems operating in harsh environments.

Inevitably, they will go wrong at some stage. They always do.

Keep a large chunk of money up your sleeve to fix it when it happens, rather than crossing your fingers and hoping that it won’t happen to you.