Decide which model you want.
Do your research on the Internet, go to dealerships and test drive, and talk to others who have the same kind of car.
Once you've decided what you want to buy, go to a valuation site like edmunds.com and look up the invoice price on the car and the current incentives. With the invoice price and MSRP of the model you want in hand, you're ready to deal.
Choose a dealer.
Perhaps you've heard something good about a dealer or you've purchased from a particular dealer before...these are good choices. Feel free to call the Better Business Bureau and check out a dealer. You can use their automated line in most cases and get up-to-date reports on the dealer's record of doing business.
If you have a trade-in, go to Kelley Blue Book (kbb.com) and get its value before heading to the dealership. Be careful not to put your vehicle in a category it doesn't deserve to be in. (Use Kelley's quiz to help determine the condition.) Rarely will a trade-in bring excellent book value.
Visit the dealer and choose a vehicle.
After you test-drive the car you want, tell your salesperson that you know what the car costs the dealership and that you are willing to pay a fair profit, but that you don't want to go back and forth. What's a fair profit? On a vehicle that is plentiful, 3% over invoice is fair for the dealer. If it is a hard-to-get vehicle, the market may indeed bear full sticker price. From here, you should deduct any applicable factory rebates.
Let the dealer appraise your vehicle and make you an offer.
Be sure to tell him all the good things about your present vehicle, like regular oil changes, extended service policies, etc. Also, take your vehicle to the car wash before you go in to the dealer. A clean car really is worth more.
What to do at the dealership finance department.
Here, you will be offered various products. Credit life insurance and credit disability insurance rates are set by the State. Therefore, they are not negotiable. However, extended service policies are. If you don't want the dealer to look at your credit file, don't give up your social security number. On the other hand, a dealer cannot quote you an accurate payment without looking at your credit.
Read everything you sign.
Make sure the figures that are on the contract are what you agreed to. Look at all the numbers. Any added items to the contract will show in a prominent place. Make sure the interest rate is acceptable to you.
Don't allow yourself to be pressured.
If you feel uncomfortable, politely leave and go to another dealer.