Shop around and ask for quotes from several dealers for vehicles that interest you. Ask for an estimate of the price. Decline any offers to test drive the vehicle until you've heard quotes from at least four to five dealerships.
Avoid mentioning that you're paying in cash. Most dealers assume people plan to finance, so there's no need to disclose your type of payment.
Point out any flaws you see while touring the vehicle or experience while driving it. A new vehicle should not present any problems, but used vehicles often will. Point out bad tires and brakes, the need for a wheel alignment and any other flaws that could cost you money down the road. Talk assertively when you point out problem areas. Don't say, "I think the tires might be bad." Instead, state that the tires are bad. Don't give the dealer an opportunity to convince you otherwise.
Sit down with the car salesman and try to get him to mention the price first. If he doesn't, start out offering a few hundred dollars below the invoice price for a new car. If you're buying a used car, factor in the problems you saw and experienced with the car. Always shoot for lower than the advertised price.
Talk about your need for a cheaper overall price. Make sure the salesman understands you're not interested in talking about monthly payments. Doing so won't reveal you're a cash customer, but it does tell the salesman you want to focus on the total price and won't listen to tactics that reduce the monthly price.
Mention quotes from other dealers in an attempt to get the salesman to bring the price down.
Agree to a price that's close to the invoice, if you're buying new. The strategy of negotiating is knowing when to stand your ground and when to give in. Don't expect the salesman to give you the car $300 below invoice, but you should expect a price that's fairly close to invoice. If you're buying a used car, strive to meet the salesman in the middle, but don't agree on a price close to the sticker price if you don't feel the condition of the vehicle warrants that cost.
Reveal that you're paying for the car in cash once you and the dealer have agreed on a price.