Tips on Buying Cars: trade in, value of my car, approval sheet

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
Happy New Year Ivan
The first thing you need to do is get financed before you go into the dealership. Since you have a better credit score shop till you drop. Demand to know the intrest rate before you go to the dealership and also get the name of the loan company. I would also demand them to send over the approval sheet from the loan company. Also, do not tell them you have money down till after you negotiate your price and payments. And I would also suggest to find a vehicle that has a large rebate to compensate for you being upside down in your focus!
Good Luck,
Ron Tittle