NEW YORK (CNN/Money) - With dealers offering all sorts of expensive incentives like cash back and zero-interest-rate financing, car buying is easy these days, right?

Not always. Some car-shopping experts say that many buyers go soft when they see those incentives. They don't negotiate well, figuring that the rebate means they've already gotten a great deal.

Here are some common mistakes to avoid.

The biggest mistake many people make is simply buying a new car too soon.

According to Edmunds.com, as many as 40 percent of new car buyers these days are "upside down" in their current vehicle. In layman's terms, that means they still owe more in payments on their trade-in than the car is worth. On average, these buyers end up owing about $2,200 on their trade-in. That amount gets added to what they are paying for the new car.

If you really must trade in your car early -- say you've got a two-seater, but now there's a baby on the way -- you're better off buying a recent-model used car, not a new car. You could save much more that way.

First of all, you're still getting the benefit of the incentives. Whenever car makers announce an incentive on a new car, used cars of the same make immediately decrease in value by about 80 percent of the incentive amount.

Second, the previous owner has already driven off a big chunk of depreciation for you. Remember, cars lose value fastest during the first couple years of ownership. That adds up to much more than you would have saved by just taking the incentive on a new car, especially if you negotiate aggressively.

If you're "upside-down" on your trade-in, you should definitely not take the zero-percent financing over the cash back. You might save on interest, but at the price of extending the repayment period on your new car. That's inviting this whole upside-down situation all over again.

Remember, car dealers aren't philanthropists -- they won't pay off your trade-in for you. They may make it more palatable, but you're still spending thousands for a car you no longer have.

All in all, it's better to wait until you're right-side-up before you start shopping. If circumstances force you to trade in early, read our story on dealing with an upside-down car.

When you start negotiating, the salesman might say: "OK. Here's the MSRP. Now we subtract the rebate and..."

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This is where you say, "Wait a minute. Back up."

You want to talk about the price without the incentives. That way, you see clearly what the dealer is getting. You should have already done your homework, so you know the car's invoice price(what the dealer paid the manufacturer for the car).

Invoice prices are available from Web sites like Kelley Blue Book, Edmunds.com and Nadaguides.com. Those numbers aren't perfect, but they give you some idea of where the dealer is coming from.

When you negotiate for a car, you should haggle from the dealer's cost upwards, allowing the dealer to make a reasonable profit. Starting the discussion with the cash-back clouds the issue -- and may dupe you into thinking that the dealer is cutting a close-to-the-bone deal when there's actually plenty of fat.

How could you do better than zero percent? Well, if you're deciding between zero-percent financing and a cash-back offer, there may be other options you're not considering. You'll probably do better by combining the rebate with low interest rate from your bank or credit union.

This is particularly true with a big rebate, say $4,000. "In one case, I had a client who got a 4.25 percent rate," said Linda Goldberg of CarQ, a national car buying service. "That certainly offset the zero-percent financing."

Have you gotten any type of college degree in the last two years or so? Are you over 55? Were you ever in the military? What type of car do you own now?

You might be eligible for extra incentives on top of the ones you already know about, said Mark McCready, director of pricing with Carsdirect.com. Some, like so-called "conquest" and "loyalty" incentives depend on what type of car you have. You get "loyalty" incentives for staying with the same manufacturer, "conquest" incentives for switching.

Others depend on your age, employment or other factors. (Try to think. Do you have an aunt who works for a car company?) These incentives are usually a few hundred dollars, but it's free money. All you have to do is ask for it.

Before you go running into a dealership, figure out exactly what you want. If you wait until you're strolling through a car lot with a salesman at your elbow, you may find that incentive money eaten up by doo-dads and upgrades you didn't really want or need.

There are plenty of sites out there that will allow you to mock-up and price a car with the options you really want. Print out the resulting pricing report and take it with you to the dealership.

Make sure you stay disciplined and think hard before letting yourself get talked into any add-ons. Be especially careful about things like "cosmetic protection" products -- special coatings, for example. If you want such things, it's usually cheaper just to apply them yourself.

Most of the time, a new car purchase is really at least three transactions. There is, of course, buying the car. But there's also buying the financing and selling the old car.

When you go to trade in your car, it's easy to be intimidated into thinking that your car's worth less than it is. Make sure you know exactly what your car is worth and see to it that you get every penny. Many car buyers negotiate hard on the new car price, then give it all back at trade-in time.

Even better is to sell your car yourself. You can get at least $2,000 to $3,000 selling a car yourself rather than trading it in, said Goldberg of CarQ.

Dealers will only pay the "wholesale" price for your car, because they have to leave room for a profit when they sell it. By selling the car yourself, you can capture something closer to the retail price a dealer would get for it.