When I was ready to buy my S2000 back in 2005. I had already spent about 3 months doing research on the cars true pricing and financing. The first thing I did was download and follow the spreadsheet found here
http://www.carbuyingtips.com/
Then I paid for a a report on sales for the car I wanted, it showed that since its release in 00' it has had a steady decline in sales. It also showed me the dealer holdback and invoice for the car. What is important to negotiate for is not really the invoice as many people say, its to get below the invoice into the area of dealer hold back. The dealer hold back is a % that the car company holds until the car is sold. So if the dealership buys the car for 20K, the car company my offer a 2k bonus (hold back) for when the car is sold. If the salesperson wants to make a deal, you can get access to some of that bonus if you know it exists.
The
four box routine is a scheme to take your money. Never, EVER EVER get into the game of "How small do you want your payments?" There are three steps in buying a car. Negotiate the price of the car. Negotiate the price of your trade-in (if any) and then negotiate the financing. Do not ever let those run together. Nail down a price first and foremost WITH your research done before hand.
The biggest tip I can give you though is this. Once you have decided on the car, performed all the research into the true price of the car and figured out the financing (if not going through dealership).
Email all dealerships within a 50 mile radius for the car you want. Lay out exactly what you expect to pay, as in "I am looking for <insert car here>, in <insert color here>. I expect to pay <insert $>. Please let me know if we can work-out a deal." - mention if you have your own financing nailed down or not. Also, if you want any options on the car.
Final note, EVERYTHING is negotiable. Start with the base model and just negotiate every piece of equipment you want. Print out sale items from the local Best Buy for GPS systems, print out retail prices for LowJack, DVDs, Rims, any option you want on the car. If the price is too high flash the research you have done and say "If you can't make this worth my while I'll just go here and give them my money".
I ended up getting a car that sold for 32k back in 05' for just over 27k brand new with 2.5% financing through Honda. I was able to do this because I was patient and waiting till Honda did their 2.5% financing special. I performed all my research beforehand and I knew exactly what I wanted. Also, I never walked onto the lot without someone from the internet sales expecting me to show up. Those sales people (vultures) who wait for people to walk on the lot are out to get you far more than the internet sales people are. So be careful. I also got a ton of freebies in terms of options that the car had on that the sales people just left on when they realized I was not going to be nickel and dimed.
PM me if you want any hints. I really like the feeling of walking onto the lot, knowing what I want and what I am going to pay and bending the dealership to my will.
jgohlke really has some great points. I think I reiterated some of what he said.
I wanted to add that buying new seems to be easier to negotiate on most of the time, unless the car is a brand new model because the depreciation is so high. However, used car salesmen are alot tougher, because things like Blue Book are out to screw the buyer and the benefit the used car dealership. Used car deals are a TON tougher. So be ready to walk away and in some cases RUN away when they start chasing you to the door
