well, DONT be drooling!
Set a price that you want to pay. my general rule is if they can't give me 10% of sticker, than i won't buy the car. I would suggest using 10% as a starting point. BE PREPARED TO WALK AWAY THAT DAY! You may not buy the car that day, and that is fine. Go in there dressed casual, but sharp, and act like you own the world. Look good, and confident. Walk the lot, and count how many rexs there are, including the one on the showroom floor. Remember this number.
Think: "I don't need this car, im just curious." Walk and parouse on your own, sit in the thing. (like you havent berfore!) Don't wait for a salesman to come to you. you are shopping for salesmen here too. DO THIS FIRST! Walk in the door, and pick the person that will sell you your car. Pick the youngest, most inexperienced looking joe in there. if someone asks you if you want help, and they're not your choice for a salesman, say "im just looking thank you." Stay away from women or older men (no offense!). When you are ready, and have shown what you are there for, then go ask the person you want for help.
The guy will start blabbing now. Avoid talking about price at all costs. Discuss ALL the options, even the ones you don't want, or are too expensive for you. Ask lots of questions. trunk space, show me the spare, mileage, stereo, who makes this, the warranty, the flat four (they love jabbering about that) etc. Think of EVERYTHING. Don't even hint at your price range. your biggest weapon is keeping information about what you want/need and hiding your budget/price range. That leaves them no ground to stand on. (after all, what you give them is all they have for information!) ESPECIALLY DON'T HINT AT THE COLOR YOU WANT! Drag the process out, and act uninformed. even ignorant. "air to air intercooler? hmmm..."
<from above>"Before you go in, set a price that you want to pay. my general rule is if they can't give me 10% of sticker, than i won't buy the car. i would suggest using 10% as a starting point. BE POREPARED TO WALK AWAY!" <end> There are more rexs out there ALWAYS, even if not at that dealer. The point is, the salesman knows your serious about your dollar limit if he sees you are willing to walk away. Find out what colors are available NOW (like if you were to buy the car immediately)-(this is good for two reasons, the salesman is always willing to help if you are going to buy right away, even if your not, hint at it, it gets them in the right price moving mood. Second, you want to know how many cars are NOT accounted for right now by other customers. -This is important for haggling.- Again, remember this number.) Even if it takes another week to drive this sucker home (my purchase took 18 days), this is the way to get your price. I know its tough, i loved the car from day one. But act like you DON'T NEED IT! BTW, this step is usually where the test drive comes in. Have fun!
When the person is done showing you the package you will finally sit down to discuss price. List out all the options you DO want, and a few more that you DONT. Opt for the body skirt and the spoiler, or the upgraded stereo too, and other things you don't really want/can't afford, even if it means that they have to install it later or import it from a distributer, or wait for the parts(the short shifter was key here for me). Basically get the price for a car that is MORE than you want. The guy will give you a price for the "more than you want" car. This is your basis.
THE GLORIOUS HAGGLE GAME
This is the easiest part believe it or not. and it really is a game. View it like that and you will do fine. Do the least amount of talking possible. Most of the time, especially with an inexperienced salesperson, the guy will dig his own hole. let your silence do the work for you. Subtle facial expressions of discontent are generally more than enough to make a point. When he gives you the number, tell him it is too high, and say "can't you help me out a bit?" Remember, even if they ask, do not give them a number that you are looking for, work from what they give you.
It is at this point that everyone is saying now is "the dealer just said "no way, there is way too much demand" inside, you are laughing now. How many were on the lot again? Probably b/w 3 and 10. How many were accounted for ie: (how many cars were available when you asked what colors were availale if you bought it TODAY)? heh heh. i had trouble containing myself when this part came. i actually said. "Come on, there are a ton of them on your lot! Stop giving me the runnaround" (there was at least one in every color, and most had a few in each color) i don't know if this outburst was smart or not, but the point is, you will have a tangible grip on the real demand this dealership is seeing, and know that you are that much better off walking away if the guy won't budge. You have no idea how much this person wants the commission on this car. if the person still doesn't budge, ask for a business card, and say thanks for your time today.
call/go back a week or so later and see how many of those rexes moved. (probably one if they are lucky. U know my dealership was moving one-two a month.) Start the haggling over again, and use that basis price he gave you last time. I was able to slowly chisel away at the price (without ever really giving my price ceiling away) saying "no no no, that's still a little too much."
Once you get at or close to your 10% number, start ditching the items you don't REALLY want. "Well, what does the price look like if we ditch the skirt/short shifter..." etc. Becasue the salesman got to your 10% number with all the options, (thats where their profit margins are, options.) when you start ditching the extras, you switch the savings to the actual car instead or those unwanted options.
Once you get the right price, have your financial calculator ready becasue many places like to tell you your financing terms then hand you a sheet with a higher rate or different terms and make money under your nose.(this is NO joke. beware here, i have heard too many stories...) Make sure your signing on the car you haggled for, and that all your options are there.
I actually test drove it a bunch of times at three different dealers.
At Natick, after i went and checked out the car, my salesman said he wouldnt be in on firday for the test drive. so i went in on friday anyway, and made another salesman (some old dude) give me the whole pitch again. (a little briefer b/c i had heard it) When i was ready to go back in and do the final haggling, i actually called the first guy and said
"I knew I said I would come in on saturday to test drive, but i couldn't do it. I spoke with yadda yadda salesman, but -I'd much rather give you the sale- you were the first guy i talked to, and to be honest, your a better salesman. I'd much rather give you the business. Will you be in on monday?"
A little ass kissing never hurt, and telling him that I'd rather give HIM the commission than a competitor was grest.
Also, if you can pit rival dealerships against eachother in price in a similar fashion... "I'd much rather give natick subaru the business than arlington..."
You may get somewhere there too.