Tips on Buying Cars: trade in, value of my car, tag price

Question
i have a 2001 ford focus, that i bought in Nov 2004, the tag price was $10,000.00, and they give me a 16.00% interest because of my poor credit,im paying $300.00 a month, the sales person told me i could trade-in me car after 6 months from the purchase. its been more than 2 years and i still owe $7000.00 on that car, and its been at the shop constently, right at this moment my car is broke from the engine, its been at the shop for a month, luckly my car is still under warranty, but the warranty is about to expire, my question is, if is a good idea to trade-in my car?,i look for the value of my car in the bluebook and is in between $3000.00 - $4000.00, im planning to trade it in for a Toyota RA4 2006.i have $2,500.00 to put down. im hoping to get a good deal and a better interest rate since i have never been late on my focus and my credit score its a litter better. i would appreciate if you can give me an advice on making this step, im really bad on negotiating, can you please give me advice on getting a good deal, how to get a better interest rate, and negotiate the price of the car and the value of my focus.                          thanks

                                     Ivan

Answer
Although Ford has managed to improve the Focus lately, reliability for the first two years (2000-2001) was pretty poor.  Although you owe more than it's worth, I do think it's a good idea to trade in the Focus before the warranty runs out.  Check with local banks and credit unions first to see what interest rate you can get from them, BEFORE you talk to a dealer.  What's important here is that you get a reliable vehicle that you will be happy with and keep until it's paid off.  Toyotas are famous for their longevity, so just make sure the RAV4 is a vehicle you can be happy with for a good, long time.  Negotiating is all about educating yourself.  Check numerous local ads to see what the RAV4s are going for, check online with sites like Edmunds and Carsdirect.com to see what they say; both of them monitor the market to see exactly what vehicles are selling for.  Inform and educate yourself BEFORE going into the dealership.