It's a sunny day early in the month and you have just gotten paid. You walk into a dealer and say "Well, I'm hoping to get a brand new car for $20,000 and I'd like to trade in my present car. What kind of car can I get?" You might not realize it then, but you've just violated almost all the rules of car negotiating.

Any bookstore or library is full of books giving tips on negotiating, but most of the tips are basically the same. By just following a few simple rules and avoiding the mistakes above, you can drive away from any car lot with your head held high.

Arm Yourself With Information

Carprices.com gives you the background info you need to know what is a fair price and what isn't, but don't just focus on the dollar value. Research safety records, repair history, resale value, and insurance rates. Consider your own financial situation and budget accordingly. Most importantly, understand all the details of the car sticker, loan papers and any contractual obligations.

Avoid Unrealistic Goals

Once you've figured out how much you can spend on a car, stick to that amount. Don't fall for low lease or monthly payments which might leave you owing lots of money in the future.

Also, consider that a sports car might not cost more according to sticker price, but might mean higher monthly bills. High insurance, gasoline, and repair costs will run havoc on your budget in no time.

Be realistic about what you can avoid, and pick a car that fits in with your lifestyle.

Keep Your Options Open

In the above example, the biggest mistakes are saying how much you can spend and that you have a trade-in. The salesperson instantly knows more about you than you know about the car's true price. The salesperson can also negotiate the sales price and the value of the trade-in, meaning you probably won't get the most for your dollar.

Consider selling your present car yourself, and using the money to pay for the down payment on the new car. Don't say how much you can spend, and don't even say how much you are willing to spend until the salesperson gives you a possible price.

Remember, the person who starts talking prices first usually loses.

Know Who You Are Dealing With

While each dealership looks pretty much the same, each salesperson isn't. Realize that a manager has final say on any deal you negotiate, and let the salesperson know that you would rather deal directly with the manager. Get any deal the salesperson quotes to you in writing, and frequently ask "Would your manager agree with that?"

Listen

The more you say the more you give away. Ask lots of questions about the car and the finance package, and listen to the answers. Before agreeing to any deal, make sure you understand all the details.

Leave Yourself Room to Maneuver

During a negotiation you maneuver by knowing as much about the car as the salesperson, and understand what the true cost of the car is to the dealer. By having a car to trade in and using a different finance company than the one used by the dealer, you can manage to get the best overall deal.

Go Slowly

Take up car shopping as a hobby, and visit dealers in different areas of town to get comfortable before you start negotiating. Look at test drives as free rides, and learn the differences between the cars. Get friends and relatives to go with you, so that you always have someone to give you a reality check. When you consider that you will drive the car for the next five years, waiting one more week to buy it will make no difference.

When it comes time to buy, pick a time of the week when the dealership isn't busy. They'll be more interested in making a sale if business is slow, and you can get some more individual attention.

It is also important to consider the time of the year and day of the month. In general, during the fall season the previous year's cars are discounted. Another rule of thumb is that dealers are more desperate to sell cars at the end of the month, in order to make quotas. Consider all of this before you decide to buy.

Be Ready To Walk Away

A salesperson will try to keep you at the dealer by saying an offer won't be good the next day, but most of the time you can get an even better offer by waiting. If the salesperson is especially unwilling to negotiate the price, give them your phone number and tell them to call you. Then leave.

Be Positive and Trustful

Ultimately, negotiating for a car price should be a somewhat enjoyable experience. Lying or being too negative during the negotiations will make it unnecessarily painful. Be honest but patient, and don't feel the need to tell the salesperson everything at the beginning. Saying you are unsure about trading your present car in even though you plan to is not lying but good negotiating.

Know How to Close

Closing is the final part of the negotiation, and is most likely the time that the buyer gives some free money to the dealer. The last fifty dollars between your price and theirs, an extra option or slightly higher interest rate is easier to agree to once you begin to relax. Be careful and realize that the dealer won't walk away from a deal when you are very close to agreeing. Take your time and enjoy leaving the dealership with that extra fifty dollars in your pocket.