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Know the value of your trade-in
Go through the classifieds of your local paper or use online resources like the Kelley Blue Book website or Edmunds.com to help establish a value for the vehicle you plan to trade in. Dealers handle trade-ins every day, and they often resell those vehicles in their used vehicle departments. The less they pay for your vehicle, the more profit they'll make when they re-sell it.

Know the true market value of your planned purchase
You should also use online resources like Edmunds.com and the National Auto Dealers Association website to help establish the invoice price and true market value of any vehicle that you might purchase.

Shop around
Once you've settled on a particular type of vehicle, visit at least three dealerships to find the vehicle that has the most features you seek at a price you can afford. You should leave each store with a firm sense of how much the dealer will charge for the vehicle you want to buy and how much you'll get for your trade-in. These figures will help you pick the dealer that seems willing to offer the best deal—and give you ammunition to negotiate an even better deal.

Feel free to test drive vehicles, but keep in mind that dealership salespeople consider anyone who has test-driven a vehicle as a "hot" prospect and may step up pressure on you to make a purchase that day.