Narrow your choices - decide what's best for you - sedan, minivan, sport-utility, etc. Test drive the models you're interested in. How's the driving position? Do the controls work logically? Is the view clear in all directions without serious blind spots?

Run the numbers - knowing the invoice price, the amount the dealer paid the factory for the car, is a must. Sources like Consumer Reports can supply you with this information for a small fee. Luxury cars, sport-utility vehicles and sports cars have the highest mark-up. Economy cars have the least mark-up. Ask about factory-to-dealer rebates that may apply to your purchase. Factory-to-consumer rebates are usually heavily promoted and therefore leave little room for dealing - the average car is marked up roughly 10%

Decide which options you want. Many manufacturers group options in a preferred package or option group which is usually less than ordering options a la carte. Subtract invoice price from the list price, figure in available rebates, add in the destination charge to determine your bargaining room.

Dealing - take your time - you don't have to "buy now". Determine the price of the new car before discussing financing or trade-in values. Present your figures and ask for the lowest mark-up over invoice. Compare this quote with other dealers to get the best deal.

Keep in mind that many factors come into play. A dealer will be more inclined to deal after holidays or at the end of the month when sales targets have to be met. Expect to pay more for a hot selling new model in the fall, but overall, $500 over invoice is a good target price.

Once you've determined the price of the new car, discuss the value of your trade-in, if you have one. Consider selling your old car through the classifieds - you'll often get more for it but you may not have the time or patience to deal with all the calls, test drives, etc. Ask you bank for the NADA or Blue Book value of your car. The dealer will offer the wholesale value - if you want more, consider selling it yourself.

Homeowners with sufficient equity should consider using a home equity loan to buy their new car - the interest is often tax deductible.

Leasing is a viable option for those who want to keep payments low. To find out if leasing is right for you, see: Leasing vs. Buying.