Get quotes via email and print them all out and start with the best offer. The email quote is solely to get you in the door, but a printed copy of their initial offer is good leverage later on.
Get the price of invoice - this is what they paid for the car(but not really, it's probably much lower)
If you're borrowing money to buy the car, shop for your money first and have your loan approvals with you.
Don't trade anything in - sell privately. Except maybe for a beater that wouldn't be worth your time/effort.
Decide if you want an extended warranty beforehand. If you think you do, read through this thread
- or at least the last 3 pages or so.
DO NOT give them your license or a credit card - it will make walking out that much harder. Yes, they will hold you hostage!
The key is to give them as few angles as possible so that you guys are only negotiating the price of the car. They'll try and burn you with 3-5 things - price, trade, finance, a down payment, and the backend.(warranty, GAP, etc) They'll give you a good price but jack you on your trade. Or give you a good interest rate but ask for $3K(sometimes a couple days after delivery). Eliminate all those angles and just work on the base price.
Your most effective tactic though, is the ability to walk. For some people it's hard to just get up and leave especially when the salesman is being nice. If they are coming within $500-700 of your number and you stand firm and walk, they'll come crawling back a few days later. This may not always be the case, however, depending on the car you're negotiating - if it's a popular car, you may just have to split the difference on the gap.
It's all about standing your ground and having the balls to say thanks but no thanks. You're not hurting anyone's feelings by walking - be firm but don't be a d1ck.
Good luck! Btw, which car are you thinking about?
Whoa! My 666 post!