1. Make sure that you negotiate the car's price separate from the vehicle financing arrangements. Most dealers want to take it all together because they can hide quite a bit of the actual price of the vehicle in the loan contract, and they will usually just try to meet a monthly payment figure that you can live with rather than disclose all the details about the loan.
2. Try to determine what vehicle you are interested in buying and become familiar with the average cost for that vehicle, online or through car dealers. Then make sure that it will fit your budget. Most financial experts recommend that you shouldn't spend more than 10% of your monthly income on vehicle costs, including the loan, gas, repairs, insurance, etc.
3. Find out what the loan will cost, you can visit some auto loan websites and/or local banks, and apply for an auto loan. See what rates and terms they offer you. Much of that will be determined by your credit history. If you can get pre-approved for a loan, it can help your buying process.
4. Try to put at least 20% of the car price on the loan as a down payment toward the purchase of the vehicle, either in cash or in the trade equity of your current vehicle. Many people are being put into loans today with longer payback periods and little down payment and the net result is that if they want to trade that car in within the first year or so they find that they actually may owe more on the car than it is even worth.
5. Find the vehicle you have been looking for and get the deal that will fit your needs. Remember to negotiate the price of the vehicle without financing first. After you settle on the sales price you can then reveal what finance terms you already have found and see if they can beat it.
6. Get all the purchasing information in writing. What is the price for the new vehicle? What is the trade amount for your old vehicle if you have one? If you finance through the dealer, what is the APR, the total amount financed, the total amount paid at the end of the loan, the total number of payments and the monthly payment figure itself?
Don't go for a car that you cannot afford. Think carefully before you decide on the sum you will be able to return. If you have doubt if you can handle it, forget it and find a cheaper car.
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