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.

In the last few years, information on car and truck values has become more accessible making it easier to determine what a good deal looks like. What tools you ask? Sites like cars.com which will allow you to search for new and used cars sorting them by just about anything: price, distance from your home, mileage, etc. Then you've got ebay where you can research recently closed auctions to see the final sale price on a given truck or car. Craigslist.com is a great tool as well for the cast of cars is always changing. Beware of ads that don't have an email link, but contain just an email in the body of the ad itself. Chances are, they are fake and will do their best to steal your hard earned cash. The question is, how do you know a good value? Visit both NADAguides.com or kbb.com and run a search for the value of a used 2004 audi a4. After checking off the options you like, vary the mileage by 25000 mile increments. This will give you a good idea of the approximate "BOOK VALUE". That's the ideal value. MAny feel that if they pay book or less, they got a good deal. What doesn't play into book value is local economy. If you live in an area that has been hit hard - such as Detroit - chances are great that you can negotiate a steal.

WHEN DEALING WITH PRIVATE SELLERS: Here's something I have been using with great success and I've never seen it written before- Ask the seller what he or she really needs to get out of the car. They always have a figure in their head or in the cases I have found with classic cars- a dollar amount they need for something. Sadly, many people sell classic cars when they need money. Here's an example: I saw an ad for a 1968 Oldsmobile 442 Convertible for $15k. After looking the car over, I knew it wasn't worth $15,000 and rather than throwing an offer out, asked what he really needed to get. The answer? $8500! I waited about 15 seconds in silence and put my hand out to shake on it. With this in mind, try calling a few ads, talk to the people and after hearing the answers you need on the car itself, ask what they really need to get out of it in cash. Now, if you don't have cash, you're kind of at a disadvantage, so just ask the question without using the cash portion. I bet you'll be surprised at the answers! I have been quite a few times.. A savvy seller will ask what your offer is and this will weed him out right away. Chances are slim that you will strike a super deal if he responds with that question, so be prepared. Your answer? How could I make an offer without physically seeing the car or truck? If you like it, make an appointment to see it. If he plays hardball and the price isn't a deal, move onto the next one.

The Asking Price: Most people do not realize that the asking price of a vehicle is just that- THE ASKING PRICE. 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. 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. ..

The Offer: 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 or 15% 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 shut up and 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-$750 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.  This is called leaving money on the table. Essentially, by failing to make an offer, you have left money on the table. That money is now in the seller's pocket!

LOW BALL OFFERS: We've all been offended by low-ball offers before and really we shouldn't be. Someone will always try to take advantage of the situation and when dealing with used car dealers specifically, I see no reason not to. If the car is priced at $10,500, you know he paid a few thousand less, so why not offer $8000, cash, right now. Take it or leave it. Believe me, the dealer has made low ball offers so he will likely take it in stride and try to meet you somewhere in the middle. If you know what you are willing to pay, be ready for his counter-offer. You can hold fast at your offer, or move toward middle ground. Depends on how much you want the car. There is always another car. Let me repeat that: There is always another car!

Before making your final purchase, there is a word to the wise: check out what the insurance rates on that new car or truck will be. I cannot tell you how many times a person would call saying:"I'd like an insurance quote on a mustang gt convertible AFTER they had already signed the purchase agreement only to find out that it was triple what they thought. Seriously folks, did you think that buying an Mini-Cooper S Turbo was going to provide you with the same rate as your Ford Taurus wagon? It's way higer. Try cheap auto insurance starts here. Now Go Get 'Em!