If you plan your automotive purchase 6 months in advance of your requirement, you have the advantage of time. Remember, the dealer wants your money more than you need to own an over-priced new car (sometimes this is worth mentioning to the salesperson). You are ready to buy when-and only when-everything is right.
You have time to check your credit, and apply for a pre-approved loan before you head to the dealership. Pre-approvals are usually valid for up to 60 days, an put you will be in a better negotiating position if you already have your financing lined up. This also sets a ceiling on your totally purchase price, which keeps your shopping realistic.
Before entering the dealership you should already set your price range, based on what you need and what you can afford. This helps prevent you getting emotional about your car (which kills your negotiating power goes once you have your heart set on one vehicle).
With new car depreciation, you might seriously consider buying a one or two year-old used vehicle (often with warranty still left). You might also get last year's new models at a substantially reduced price.
Be prepared and knowledgeable. Research online and through books, friends, and word of mouth to learn as much about the car(s) you are interested in as possible. Knowledge is power and will improve your chances are of getting a good price. Don't let the dealer use a favourable Consumer Report review to inflate vehicle pricing. The dealer would likely ignore an unfavourable review. Keep in mind that dealers sell cars for a living, so they know a lot more than you do. They also negotiate these deals every day.
Know the value of your trade-in and remember that you can usually get a better price through a private sale.
Relax yourself before going into the dealership (deep breathing in your car helps before exiting). Salespeople sense nervousness and insecurity and will try to use it to their advantage. Stay calm and always seem willing to walk away from the table, so the salesperson will to be more accommodating.
To give strength to your negotiations, be prepared to discuss what you've learned (especially if its less than perfect) regarding crash tests, consumer reports, etc.
Always negotiate up from the invoice price, not negotiate down from the sticker price (the MSRP - manufacturer's suggested retail price). You can find this invoice price from the research you did before you went to the dealer.
Negotiate options carefully, and you might be able to give up some add-ons to get a better price. But often you can get extras added in at no charge (especially for a car already in the dealer's lot). Be careful, not to get suckered into items you don't need or that are high markup for the dealer, like extended warranties, undercoating, or rust-proofing.
When the dealer offers to discuss financing and your trade-in, inform him that you will discus those after you have agreed on a price for the vehicle. It also helps not to reveal that you have a trade-in until after a price has been agreed upon.
Avoid making the first offer, letting the salesman appear more needy of this sale. Do not increase your own bid unless they make an offer. When raising your bid, do it in small increments, of maybe $50 to $100 at a time.
If you've already checked prices from several dealers for different cars or models, so you can move to the next car or dealership, if the negotiations aren't progressing to your satisfaction.
Take it slow and don't move too quickly to a final offer. Holding out gives you a better bargaining position. A salesperson won't want to lose a sale, they have invested much time into.
Negotiate a 30-day return clause into your purchase or lease agreements. This is not usual when buying a car, but gives additional protection.
Anything not in writing from the dealer or manufacturer will be difficult to prove if you have any problems later. Read the dealer's "Automobile Consumer Bill of Rights." Be sure to have the dealer staple signed brochures and specification sheets to the final purchase agreement, since this makes them legally binding.