I had a friend who worked in the finance dept of a car dealership. People would spend 2 hours trying to wangle the best possible deal from the salesman, beat him down, get free floor mats, whatever. Then they would walk into my friends office. How does $400 a month sound for payments? OK sure. And in 2 seconds they would agree to a loan at 12% where the banks would have given them 5%. And the dealer would earn an extra $3k on the car loan.
I went into a dealer just about 3 weeks ago, told the salesman I wanted a new car, was trading in my truck, and wanted to spend no more than $130 a month over 3 years. He almost fainted and then basically called me crazy. The sales manager even tried to get me to lease a car instead of buying. Ended up walking out of there with a new car(end of the model year) for $125 a month for 3 years with $10,300 trade in on my truck (KBB value around $9900 and needed about $2k worth of work-not including some cosmetic body work) and $2k down. Think I end up paying about $300 in interest if I take all 3 years, but plan to pay it off sooner. I save more in gas than my monthly payments cost. The trick was knowing what we wanted and refusing to budge from it.