You see a sweet new convertible sparkling on the car dealer’s lot. You know better than to just walk in cold and let the salesman put the screws on you, so you check it out online. Turns out the car is reliable and gets good reviews; it’s fully loaded and you can afford the lease payments. You worked your butt off all winter, and have the bonus to show for it. Any reason not to sign on the dotted line? Yup, several reasons, in fact. By the end of this article, you’ll know all of them.

As a cheapskate, the son of a salesman, and a guy with a passing understanding of numbers, I’ve always been a pain in a car dealer’s ass. But to help you traverse the minefield that is a car lot, I called on two highly trained road warriors who make me look like a humble plebe. Mike Quincy has one of the best jobs around, putting cars through their paces on the test track for Consumer Reports. Unlike other reviewers, CR purchases the cars at retail, so the manufacturers can’t gussy them up. When I spoke to him, he’d recently driven his 107th car off the lot. “I just bought a Maserati yesterday,” he told me. Like I said, the guy’s got a good job.

I also tracked down an honest used-car salesman (yes, there is such thing). Kelly Calland, co-owner of Columbus Auto Resale in Ohio, has been in business for 23 years, and the company has an A+ rating from the Better Business Bureau. How honest is he? On his website he declares that he enjoys “sports and golfing.” How many golfers do you know who will admit that golf is not, in fact, a sport?

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How much car can you afford?

Take a look at your budget and figure out how much money you’ve got left after the basic needs, from rent or mortgage and utilities to your 401(k). Come up with a monthly number and run it through an online calculator to see how much car that will get you. For example, $400 a month for 48 months will buy you a $25,000 car, assuming a $3,000 trade in, a $4,000 down payment, and a low interest rate. Never extend a car loan beyond 60 months: You run the risk of owing more than the car is worth.

Buy or lease?

Buying is always a better deal, as you can get years of service from a vehicle after it’s paid off. If you lease, you will always be making car payments. When you buy a car, you know exactly what the price is. Lease terms, however, are confusing and it can be hard to tell exactly what you’re paying for in interest and fees versus the car itself. Guess who benefits when the consumer is confused? Unless you have tax reasons for leasing—maybe you’re a business owner who can deduct the payments—you’re better off buying. But, you say, for the same monthly payment you can get a nicer car if you lease. That is true. But if you can’t afford to buy that car, you can’t afford that car.

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New or used?

You’ve probably heard that a new car loses thousands in value the moment you drive it off the lot. Since that saying is actually true, let some other guy drive the car off the lot. Then you buy it at a reduced price. “A good two- or three-year-old used car is the best automotive buy out there," Quincy says.

This is especially the case right now. During the financial crisis, new-car sales and leases plummeted, therefore, used-car inventories dropped off two years later. With less supply, prices went up. As the economy recovered, though, new-car buying and leasing picked up, and now those late-model used cars are coming to market. The National Automobile Dealers Association says 2014 will mark the first year prices have fallen since the recession, and Calland has seen evidence of the trend at auction.

To avoid getting stuck with a lemon, the first line of defense is to stick to cars still under factory warranty. Calland suggests looking for a highly rated dealer who’s been in business for a long time. “Some guys are fly-by-night, they just want to make their money and close after two years,” he says. Ask outright: What happens if the water pump fails after a month? It’s no guarantee, but get a handshake agreement that the dealer will stand behind the car.

Do your research.

For a new car, find out exactly what the dealer’s price (or “invoice”) is on the vehicle you want, right down to the optional alloy wheels. Quincy says he configures the options and then asks a few dealers for the best price they can give him. With a site such as Consumer Reports you can tell exactly what the dealer paid, including “dealer holdbacks,” the secret money the factory will pay to the dealer if they sell a certain amount of cars. “Just say, will you take 3% over invoice?” he recommends, a slim, but fair, profit for the dealer.

Research is especially important, of course, when it comes to used cars and reliability. Here’s an insider’s tip from Calland: A few manufacturers have been using a mileage-boosting technology called a “continuously variable transmission [CVT].” In theory such a feature sounds great, but in reality some older systems can be faulty and may lead to trouble down the road. So stay away from used cars with CVT.

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Are convertibles really more expensive in the summer?

Yup, especially with used cars. Dealers bid for them at auction, and it’s all about supply and demand. So buying automobiles, like fashion, is seasonal: A fourwheel drive costs more when there’s snow on the ground. And, Calland says, you’ll pay more for a pickup in the spring when contractors are snapping them up. “Cars are a commodity,” he says. Buying out of phase with the seasons can save you real money. Calland says a $15,000 convertible could go for as much as $2,500 less in a snowy February than it would in June. Tell Calland what you want and what you’ll pay, and he’ll look for that car at auction. Then be patient, and you can get a dollar’s worth of car for 84 cents.

Similar dynamics are at work when it comes to new cars. “If gas prices spike to $6 a gallon, guess what: There’s going to be a line out the door at Toyota and they’re going to sell every Prius on the lot at full price,” Quincy says. That’s when it’s time to go SUV shopping. Supply and demand also holds true on the individual level. “When you’re at the dealer,” Quincy says, “don’t show the sales people your love for a car. Don’t slobber, ‘I’ve wanted this Mustang since I was 15 years old,’ because then they’ve got you.”

“How much do you want to pay per month?”

Never answer this question. The salesman is trying to take your eye off the ball so you focus on the monthly payment, which can be massaged by extending the duration of the loan, for example. Even if the monthly payment is $250, you may still be overpaying for the car. Your answer: “I’d rather focus on the sticker price.”

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Do you need the “LX package?”

A base-level Volkswagen Passat runs about $20,000, but the sticker on the window of the “V6 SEL Premium” version reads “$34,265.” That’s a 71% increase, and those prices represent very different categories of rides. For $38,000, you can drive home a Mercedes C250. Yeah, I know, the Benz has a four-banger compared with the Passat’s V6, but here’s the point: Options can add up in a hurry. Do your bank account a favor by driving a base model car—and start your price negotiation there, too. Even if you can’t live without a moonroof or some other option, ask the salesman for a price on the base model. Then tell him to throw in the moonroof and he’s got a deal.

What the hell is a “destination charge?”

It’s a fee for getting a new car to the dealer, and you’re going to pay it whether you’re buying a Durango in Detroit or a Porsche in Pittsburgh. Don’t fight it. But you may be able to negotiate the “marketing fee,” which the dealer imposes to help lower advertising and marketing costs. And Quincy says most people don’t come out ahead when they buy the extended warranty. “Take that $700, put it in a savings account, and use it as an emergency fund.” Or a “sound system” fund. Your call.

Two more things to remember:

First, car dealers are businesses, and they need to make a profit. So once you get a fair offer, take it, and drive home happy. Second, when you are looking for a loan, try a credit union. Seriously. They’re easy to join, and their rates are actually lower than what you can get at a bank. PenFed, for instance, was recently offering car loans at just under 1%. How can they do that? Well, let’s boil it down to car terms: Picture a credit union CEO’s car. Now picture a bank CEO’s car.

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Jack Otter is the author of Worth It…Not Worth It? Simple & Profitable Answers to Life’s Tough Financial Questions.