While you will likely save money when buying a used car, the shopping process can be more difficult than if you buy a new car. Beyond considering which vehicle you want, you also have to consider t...

Negotiating for a better price on a car may be the most intimidating part of the car-buying process. Many people are not comfortable negotiating, particularly for something so expensive and important like a car.

But learning how to negotiate well is important: it can quite literally save you thousands of dollars, according to Mike Schatzki, a negotiation expert and consultant who owns Negotiation Dynamics.

Do your research

Schatzki recommends starting the negotiation from the comfort of your own home. After you have selected a few models that you’re interested in buying, browse the internet to get an idea of how much the car you’re interested in costs at various dealers. If you’re buying new, look for the dealer’s invoice price - the price the dealer actually paid for it, not the sticker price. If you’re buying used, look to see what that model is actually selling for.

You should also research financing. At the very least you want to understand what kind of rates and financing terms you qualify for. If you can secure financing through a bank, credit union or other financial institution, that will strengthen your negotiating position and probably provide you with the best deal.

Gather quotes

You can start online with quote-gathering services such as Edmunds.com or you can  call dealerships directly. If they won’t offer you a quote for the car over the phone, tell them you’ll have to go somewhere else. Don’t agree to go to the dealership to get a quote, which will waste your time and put you in a high-pressure situation sooner than necessary. You want to spend as little time at the dealership as possible.

Gathering quotes not only gives you an idea of where you might buy the car, but gives you a great negotiation tool, according to Steve Hague, a negotiation expert who owns national car buying service ProAutoBuying.com.

“Nothing succeeds in negotiation like having alternate options and letting the party you're negotiating with know it,” Hague said.

At the dealership

You should know exactly what kind of car you want, exactly how much money you can afford to spend and how you would finance your car purchase – but you don’t need to share any of this information with the dealer. Focus only on the price of the car.

“Don't tell them how much you're looking to pay each month,” Hague said. “That's the worst thing you can tell them and probably the first thing they'll ask you.”

A dealer can almost always give you the monthly payments you want, but not by reducing the cost of the car. Instead the dealer can stretch out the terms of the loan, which will ultimately leave you paying more in interest.

You also don’t need to tell a dealer if you have financing or that you might want to trade in another car. If the salesperson asks, say that you can talk about financing later.

Making an offer

After you’ve found the car you want to buy, tell the dealer to make you an offer. Have in mind your set maximum price that you’re willing to pay, then offer lower than what you think you could possibly get, so you have room to negotiate. Raise your offer in small increments.

If you reach your maximum price, stop and threaten to leave - then do it. Your ability to walk away is a powerful negotiating tool, because not only does the dealer sacrifice a sale, but they send you off to their competition, Hague said.

However, you must actually be willing to walk out and leave the deal behind. The dealer may decide it’s not worth chasing you down. That’s OK - keep shopping.

Financing

If you are financing with the dealer, don’t let your guard down, because you’ve got more negotiating to go. Luckily, you’ve already done your research on financing and know what your best rates are.

Just like with the car, make sure the business manager knows that you have other offers and ask them to beat your other quotes. If they can’t do it, secure your financing elsewhere. Each percentage point in interest can mean hundreds of dollars saved over the term of the loan. Always make sure you understand exactly what you are signing.

No matter what happens, trust your intuition. If the dealer’s employees get rude or too pushy, or you simply feel like something isn’t right, then leave. Remember, there will always be another car to buy.