4. Know the numbers.

Yes, we already covered this under the heading of general concepts. Now let's look at it in a little more detail.

When you visit a dealership, and go into the sales room, the salesman will reach for a 4-square worksheet. They do this to keep track of the numbers in the deal that will affect their profit. Don't you think that if the pros do this, you should do the same thing to protect your money? If you don't, how else will you know what to pay for the car? What to take for the trade-in? What your monthly payment should be?

Using Edmunds.com, find out what the invoice, sticker and Edmunds.com True Market Value^® (TMV) prices are for the car you want to buy. TMV^® is a new concept developed by Edmunds.com. It's a guide that provides you updated weekly pricing on what you should pay for a vehicle — without having to spend hours negotiating with a dealer.

Write these prices down. Then find the approximate price of your trade-in. Then figure out how much money you will have to borrow and how much your monthly payment should be. Consider the difference between paying cash, leasing and financing. Make sure you also find out about holdbacks, rebates and incentives.

Is your head swimming with numbers now? That's pretty normal (unless you're some kind of math whiz). That's why you should write all this down. Then, with the numbers in front of you, get out your calculator and crunch them. When they have been put through the wringer, you will get one gleaming, shiny number which represents what you should pay for the vehicle you want to buy. With that number in mind, set a range. Start low and increase your offer in small increments until they say the magic words, "We've got a deal.