Car buying 101

5 Golden Rules to Buying a New Car

Save time, money and frustration by familiarizing yourself with the ground rules of purchasing a new car

People typically begin looking for a new car when the old one has racked up too many miles. In fact, according to Road & Travel Magazine, it’s the number one motivation for new car purchases. No matter what your reason is for beginning your search for new wheels, keep in mind the Five Golden Rules before you step into the dealership.

  1. Begin negotiations with the Invoice Price.
    The price on the car you’re considering is called the manufacturer’s suggested retail price (MSRP) – also known as the sticker price; however, the price you want to know is the invoice price, which is what the dealer pays the manufacturer for the car. Begin negotiations with the invoice price in hand, which you can research online, and try to get as close to that number as possible before any discounts or rebates are applied.
  2. Have a working knowledge of discounts and rebates.
    Students, first-time car buyers, active/retired military and credit union members are just a few groups that may qualify for certain rebates. The most common are cash rebates from the car manufacturer, which is money that you get back after the sale. If you qualify, you can use the rebate to increase a down payment or you can bank the cash for a window tint. While salesmen may share some discounts with you, they are not obligated to tell you everything that you may qualify for. Third-party sources, such as and Kelley Blue Book, are good places to start researching.
  3. Be prepared to negotiate three times.
    While bundling can sometimes be cost-effective, it is not when buying a new car. Be prepared for a three-part deal to achieve the best outcome. Negotiate the sales price first. Then come to agreeable terms on the value of your trade-in, or sell your current car on your own. Finally, talk financing – which includes the monthly payment, terms of the loan and interest rate. Remember, if you still owe money on your trade-in, the amount that you owe will likely be included in the new car’s financing. To keep things clear, write down what is said and compare those numbers to the sales contract.
  4. Ask around for a great dealer.
    Consumers candidly share their car dealership experiences through online reviews on websites, such as,, and You can also consult your circle of friends and find out who was happy with their last car deal.
  5. Shop for the best financing.
    Golden Rule #3 indicates that you can finance your new car through the dealership, but that’s just one option among many. Talk with your credit union about their car loans, which can be, on average, 1 to 2 percent lower than financing from conventional banks. Ask lots of questions about any promotional dealership ads for low interest rates. Only about 10 percent of car buyers qualify for the zero-percent and low-interest-rate that are offered.

Once you’ve sealed the deal, know that Arizona does not have a “cooling off period or “three-day right to cancel a car” sale; however, it does have a Lemon Law for defective new cars.

By following these 5 Golden Rules, you will increase the odds of not only driving off the lot enjoying that new car smell, but also feeling confident that you negotiated the smartest deal possible.