The first step to getting a good deal on a car is to give yourself enough time to find one. If you have a time constraint, you’re giving car dealerships an advantage – and they will know how to make the most out of it.

Set at least two full weekends aside so that you can comfortably pick out a suitable car and endure more than one round of negotiations.

Before you even visit a car dealership, make sure you’ve spoken with your bank about financing and have a loan already in place. This means you know exactly how much you have to spend and what the repayment rate is, so you can’t be sweet-talked into something beyond your means.

Don’t sell your old car to the same dealership you’re buying from. This gives them all the power... and they’ll have zero incentive to make you a good offer. Ultimately, they stand to make a profit selling it on elsewhere. You’re more likely to get a decent deal anywhere else.

Before shopping for a new car, pick three types that you’re interested in. It can be more than three, but avoid having just one preference as this limits your options. Test drive the ones you’re interested in, see what you like, but do not buy under any circumstances.

Once you’ve completed your test drives and settled on a car you want, go home and make two lists: one column will represent “must-have” options and the other will cover non-essential options that you would like. This list is going to help you find the best deal.

Ignore the invoice price (or “dealer cost”) of a car. It’s almost always higher than what the dealer ends up paying to the manufacturer. Besides, dealers are experts at hitting you with extra charges and unexpected add-ons. Knowing the invoice price won’t protect you from that.

The most important factor in getting the best car deal is competitive bidding. Contact 8-10 dealerships, express interest in your chosen car and mention that you’re doing competitive bidding. They may try to tell you that it doesn’t work like that.

Tell the dealer that if they give you the best price, you’ll come down and buy the car from them that day. Suddenly their tune will change and they’ll promise to call you back.

The dealer may make an offer like “invoice price + $500.” But when you show up, a range of hidden fees (e.g. “advertising fee”) appears. This is where things get tricky, but it can be overcome if you know the right strategy. We’ll take a look at that next.