Buying a Car

• 1). Set a budget on how much cash you're willing to spend on a car deal. This new car budget will be important when negotiating with the sales people at car dealerships.
  
  
• 2). Decide on the car that you want to buy. Visit several dealerships until you have found one within the price range of the car budget that you set.
  
  
• 3). Calculate a cash offer for the car that you want to buy. A good rule of thumb is to calculate an offer that is 5 percent over the dealership's actual cost of the car, not the MSRP (manufacturer's suggested retail price). The dealer's actual cost is the car's invoice price minus any factory rebates and incentives it received. Free tools from InvoiceDealers.com and Edmunds.com offer free information on new car invoice prices and factory-to-dealer rebates and incentives.
  
  
• 4). Negotiate with the salesperson or sales manager and offer the cash deal that you have calculated. If they counteroffer, consider the offer and decide whether it is too high. Never tell the sales person that you are paying cash, as he'll try to raise the sticker price of the car because he won't be able to make any back-end sales or commissions from financing deals.
  
  

Selling a Car

• 1). List your car for sale in newspapers and classified ads. Create a catchy headline and full description of the car along with any photos if allowed. Include the price of the car in the advertisement, but set a price that's 5 percent to 10 percent above the actual amount that you'd like to receive just in case any buyers haggle over the price.
  
  
• 2). Answer calls from interested buyers. Instead of allowing each person to visit the car individually, tell all the interested buyers that you'll be available to show the car on a specific date at a specific time. Don't mention that other buyers will also be there at that time.
  
  
• 3). Show the car on the specific date that you set and allow anyone that's interested to test-drive the vehicle. Entertain offers from the interested buyers. If your car is in excellent condition then you may have interested buyers bidding against themselves ending in the best cash deal for you.