Prior to negotiating on your vehicle at all, it would pay to know the current market value of the vehicle you are in search of. In viewing used car buying guides such as NADA or Kelley Blue Book, you will see three sets of prices

The wholesale price is the price you can expect to receive from a dealer at trade-in. Trading in at the dealer is another mistake, but we'll get to that later. 

The Loan price is the amount a bank will be willing to loan on that vehicle. This is usually the retail amount of the vehicle minus 20% which is your down payment. 

Retail is the highest price you will pay for the vehicle and this is the price charged by dealerships. As you can see, they pay you the least for the trade-in and charge the most for the vehicle on the retail side. As you can see, herein lies the spread. You as a consumer can pretty much rest assured that the dealer paid less than or the wholesale price- which you now know and is looking to charge you the retail price, or more. You need not be armed with much more here as a basis for your negotiations. 

Of course, the options in the car, it's repair and collision history and the mileage of the vehicle will affect the price either positively or negatively. Luckily for you, in the back of the NADA or Blue Book Guides, there are option value charts. These charts tell you what to add or subtract for mileage, options and drive train.

There are many ways to negotiate the best price of your new or used car purchase. If you are like most people, this can be a difficult procedure to carry out. Most people do not realize that the asking price of a vehicle is just that, THE ASKING PRICE. To an experienced salesperson, your first reaction when viewing the vehicle for the first time, can usually determine how negotiable the price of the vehicle will be. During the viewing of the vehicle, do not play into the sellers hands by letting them know how much you like the vehicle. For example; color, options or vehicle condition. Before test driving the vehicle, you should test every option available, both inside and outside the vehicle. Point out all faults and non working components found at this time for negotiating the price later on. If at this time you have found nothing wrong with the vehicle, it is up to you to decide whether or not you like all of the driver comforts of the vehicle. Now it is time for you to test drive the vehicle. During the test drive, be sure to point out all noises and obvious problems with the vehicle whether small or large. Make sure to question everything you are unsure of. There are no stupid questions or comments at this time. ..Now it is time to negotiate the selling price. Even if you want the vehicle very much, still do not let the seller  know this. Act like you have researched the average price of the vehicle and always come in with a price at least $500-$1000 less than the asking price. Be ready to commit to the deal if a reasonable price is agreed upon. Cash is a great motivator in closing the deal. In most cases a person who is looking to sell a vehicle will not turn down a reasonable cash offer. If the seller turns down  your offer, either make a new offer or wait for a counter offer.  After you make your initial offer, do not speak again until he answers. Do not try and justify your lower answer, simply wait in silence until he/she speaks. This may be the most awkward silence you have experienced to date, but it works.  

For example; If you have looked through local papers and found that a particular car is worth $5000, you do not want to pay more than that unless the car is in exceptional condition. If the asking price of the vehicle you are looking at is $5000,  your offer on the vehicle should be at least $500 less than that. If the person does not accept, they will usually counter offer with a price in between the asking price and your offer. Experienced sellers usually advertise the asking price of the vehicle a few hundred dollars higher than what they are willing to accept for the vehicle, to leave room for negotiating with educated consumers. If you, the consumer, are not aware of the fact that negotiating is a option, you will be paying too much for your new or used vehicle.