Given the rather active discussion going on in RocknVol's thread, I thought the board might be interested in this story from Edmunds. It's long, so I've only copied p. 1, but there's a link to 2 at the bottom.
What really goes on in the back rooms of car dealerships across America?
What does the car salesman do when he leaves you sitting in a sales office and goes to talk with his boss?
What are the tricks salespeople use to increase their profit and how can consumers protect themselves from overpaying?
These were the questions we, the editors at Edmunds.com, wanted to answer for our readers. But how could they really know that our information was accurate and up-to-date? Finally, we came up with the idea of hiring an investigative reporter to work in the industry and experience, firsthand, the life of a car salesman.
We hired Chandler Phillips, a veteran journalist, to go undercover by working at two new car dealerships in the Los Angeles area. First, he would work at a high-volume, high-pressure dealership selling Japanese cars. Then, he'd change over to a smaller car lot that sold domestic cars at "no haggle" prices.
We invite you to read the following account of Phillips' day-to-day experience on the car lots. Doing so will broaden your understanding of the dealership sales process. It will also cast a new light on the role of the car salesman. And, finally, it will help you get a better deal — and avoid hidden charges — the next time you go to buy or lease a new car.
"...Somehow, the earlier sales sheet had gotten "lost" and the numbers they had agreed on were "forgotten." The price of the minivan and all the extras shot back up and the price of his trade-in took a serious dive. For the next two hours Mr. Park was hammered by every closer in the dealership. I got to watch a variety of styles: impatience, cajoling, begging, threats. Through all this his wife sat by his side clutching their little baby. Mr. Park began complaining that he had a headache and his manner became increasingly angry. At one point he ominously muttered, "Don't screw with me."
I couldn't exactly figure out what had happened to the deal. Yes, he had been offered $4,000 for his trade. I knew that for sure. And I seemed to recall that he had been offered the minivan, including the extras, for as low as $26,500. Those extras had not been written into the contract or they had been conveniently forgotten. They reemerged at the end and completely blew the deal. Finally, Michael picked up the papers and walked out of the cubicle muttering, "You're wasting our time."
I read this and several other Edmunds articles and priced on Edmunds, NADA, KBB and Craigslist for both the vehicle I was purchasing and my trade-in. Great advice in several links on the site.