Does anyone here have some good experience with negotiating with car dealerships. I understand that it is near impossible to "beat" the dealership persay but that doesn't mean I won't do my best trying.

I've thought about purposefully taking out an outrageously inflated loan through the dealership to finance the purchase of a new car to driven down the initial purchase price to as little as possible. Most dealerships make a lot of their money by screwing over their customers on their auto financing and I figured that they would be more willing to sell at cost figuring they would make thousands of dollars on a "sucker" loan. I would then proceed to pay off the entire loan the day after I take it out and eat the pre-payment penalty of maybe $200-300. The few hundred dollars paid to the bank would be made up for by the thousand(s?) saved from the purchase price.

On the other hand I could simply imply to the salesmen and sales manager throughout the entire purchasing process that I am looking to finance and that I have bad credit during negotiations to try to get them to lower the initial sales price. Then when they move me to the finance guy to seal the deal so to speak and simply say I've changed my mind and will be paying cash in full. This option saves me the loan pre-payment penalty but may not get me as good of a price as actually taking out the loan.

Is this a viable tactic in negotiating car prices? I have to assume that car dealerships having dealt with a broad range of customers would be familiar with such a tactic but I'm assuming it would be quite rare for a customer to pull something like this. Am I simply too optimistic in thinking a dealership will go down that low and assume they will make more money off the financing and not keep at least a small cushion in case some schmuck (me) tries doing this?