Published: Tuesday, 5 May 2009 | 10:51 AM ET

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It’s a whole new world out there when it comes to buying a car. With Chrysler in bankruptcy, GM shuttering its Pontiac brand and thousands of auto dealers closing their doors across the country, buyers have new leverage in price and incentives on their side. But there are still certain things you shouldn’t do before you drive off the lot.

Lauren Fix, the “car coach” and our resident auto expert, says the first mistake is telling the salesperson up front what you can afford and whether you are leasing or buying. Don’t think in terms of monthly payments.

Be careful of too many add-ons, she says. Avoid all the extras like fabric protector, extra rust proofing and – most importantly – the extended warranty. They will cost you over the life of the loan or lease and are not worth the price, Fix says. The best bet, if you need any extras, is to buy them separately (but, again, stay away from the extended warranty. Here’s why.).

Finally, don’t put zero down. Cars depreciate rapidly, so if you finance the full purchase price you often find yourself upside down in the loan immediately. This will hurt you if you intend to sell or trade in your car before the loan is paid off. Resist the urge to walk off the lot with a brand new car without having to fork over a dime upfront.

To prove just how much of a buyer’s market it is out there, Fix found one buyer who was looking for a Honda Civic LX in Detroit. The stick price for the car was $18,725. The first dealer offered it for $17,305; the second dealer came in at $17,207 and the third went the lowest yet, to $16,900. The customer went back to each dealer for a final quote and the first dealer came back with an offer at $16,740, selling the Civic right off the lot.

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