Most car buyers will normally think about the type of car they want to buy and then wait until they have done a test drive at the dealership before thinking about finance.

 This is a mistake because it puts you in a bad position to negotiate, meaning you’re most likely not going to get the best deal on your finance either.

 Before starting your search it’s worthwhile speaking to a finance broker and getting pre-approved for a car loan.

 Here’s what you need to do.

 Understand the costs of purchasing a car

 Buying a car will normally cost you more than the price of the car alone. There are a number of hidden costs that you can easily overlook initially.

 You should factor in the cost of stamp duty in your state and if there are any transfer fees that might be applicable. It’s also a good idea to figure out what your insurance premiums will look like and if you need to pay for other things like roadside assistance.

 Finally, it can be worth getting an independent vehicle inspection done prior to signing any contracts to ensure the car is in sound working order.

 Save up for the down payment

 While it might be possible to get a car loan without a down payment, the odds of being approved will potentially increase if you have a deposit in place, as this reduces the risk to the lender.

 By saving, it also demonstrates your ability to manage money which a lender will look upon favourably.

 Check your credit

 If you’ve never had credit in the past this can sometimes be an issue as a lender likes to see your track record of managing loans.

 Most people will have a credit score and, in the lead-up to applying for a loan, you should be looking to clean this up. However, avoid taking on any new debts and try to pay off your current debts on time.

 If you’ve never had credit, start by opening a bank account and regularly depositing money. Even utility bills are a form of credit and by paying them on time or early it will hold you in good stead.

 Get pre-approved

 When you have some money saved up and a budget for purchasing a car, then it’s worth getting pre-approved. Speak to a finance broker and they can compare your loan options. You’ll need proof of income and your assets and liabilities.

 This should give you a clear picture of how much you can spend and what type of car you can purchase.

 Be sure to understand the types of conditions that come with the loan. There could be specific conditions around the age of the car or even the type of car.

 There are a host of car loan products out there and your finance broker will be well positioned to talk you through all the differences and compare the best options for your personal circumstances.