The October 2008 issue of Consumer Reports has an excellent article on why it's better to buy a gently-used car than a new car. They point out that for the same five-year owner cost you could get a much spiffier 2-3 year old used car. For example, you could buy a new Toyota Camry V6 or a 3 - year-old Lexus LS for the same 5-year cost.
We bought both of our vehicles new (because of cabin configuration/size) even though we'd have preferred used, but got great deals by doing the following:
1. Deciding exactly what we wanted before going to a lot (ie, do you want a sunroof? CD changer? Leather seats?).
2. We went online at Edmunds.com and found out what the dealer invoice was. We decided how much over invoice we'd be willing to pay. This was our upper limit for negotiations.
3. We asked for online bids through Edmunds.com and got one from a dealer about an hour away. It was for $200 over invoice.
4. We arranged financing separately and got our financing check before calling our local dealership.
4. We went to our local dealer and told them we wanted X model, X color, and we had a bid for the same vehicle for X price (the invoice +$200). We told them we'd buy it from them that day if they could meet the price. If not, we'd drive south and get the other car from the other dealer.
5. Got our cars for $200 over invoice, paid for using our own financing (future cars will be bought with cash). Refused their add-ons (underbody coating not necessary here, etc.).
No hassle for us, and easy for both of us. Our dealer didn't have to spend a lot of time on the sale, and we spent a total of 1 hour on the lot signing papers. If I ever buy a new car again this is the way we'll do it.
