A car is likely to be the second most expensive purchase that you make, after your house. Whether you are buying a new or used car, you may need to take out a loan to finance your purchase. There are a wide and often confusing range of options for car finance, but the following tips should help you navigate the car-buying process successfully and save money in the process.

1. Shop around for your loan - Don't just accept the financing offered by the car dealer. Car finance is available from banks, credit unions and on-line. Our expert brokers will help you find the best product.
2. Save up - By putting down a deposit of 20% or more you may qualify for lower interest on a loan. Or save the whole price and pay cash!
3. Pre-arrange your loan - Having confirmed finance will put you in a better position to negotiate a lower price on a car. Remember to negotiate on both the car price and the finance - separately.
4. Ask whether the car qualifies for a manufacturer's rebate - Special deals are often available on new cars. Research manufacturers' on-line sites for current offers. You can use the rebate to make extra repayments.
5. Avoid 6 or 7 year loans - The interest rate will be very high, and you'll owe more than the value of the car for a very long time.
6. Avoid honeymoon deals - Loans with no payments for the first few months or first year may seem attractive but you'll only end up paying a high interest rate later to cover the payment-free period.
7. Consider alternative options - By using a home equity loan, if you are in a position to do so, you may benefit from a lower interest rate and tax-deductible payments. Or you could open an offset account - and consolidate your car loan along with other debts into your mortgage account.
8. Don't pay for a car on a credit card - Even if the company guarantees a low interest rate, this could be hiked up significantly if you make any late payments. Your high card balance may also affect the interest charged on additional purchases.
9. Carefully consider proposals to pay off your old car finance with the new car loan - This will just be transferred to the new car loan and you'll incur extra interest.
10. Don't buy credit insurance unless your lender insists on it. Check whether your existing insurance policy will cover the new loan before taking out a new policy.
11. Consider leasing instead of buying - A down-payment may not be required and the initial costs will be lower.
12. Making the highest monthly payments you can afford on a high interest loan will reduce the length of your loan and the amount of interest payable. Make additional payments whenever you have surplus cash, if there are no penalties for doing so.
13. If you get a low-interest car loan - Opting for small monthly payments and using your surplus cash to invest or to pay off higher-interest debts may save you money.
14. Refinancing - If a better deal becomes available you may benefit from switching your car finance, as long as you don't incur exit penalties.
15. Downsize your car - Saving money on finance, maintenance and other expenses.