Car loans are not as straightforward as some buyers think. In fact, there are things you do (or don’t do) that could end up costing you more when you buy your car. If you want to save money and find a loan that’s perfect for your financial situation, read on to learn more about five expensive mistakes that are avoidable.

1. Skipping the Car Research

There are many models available, each offering different features and options. It may be tempting to skip the research and head straight to your local dealership to see what they have on the lot. Do not do this. You should have some idea what you want before you go.

Write down a list of needs and wants and research models to determine which ones offer the best fit. Narrow down your options by comparing the average cost to your budget. Now you know what to tell the salesperson you want when you get to the dealership. It’s a good way to avoid being upsold a more expensive model that you do not want or need.

2. Winging the Budget

Writing out a budget is no fun unless you are an accountant. It’s a necessity if you want to buy a car you can afford. Create a budget that covers all of your monthly expenses to determine how much car payment you can afford. Remember to also factor in other items like increased insurance costs (if applicable), fuel costs, and maintenance.

3. Not Getting Loan Pre-approval

Smart car buyers always get pre-approval for their loans. This looks good to the seller and will provide an accurate overview of how much you can afford to spend. Remember that pre-approval is only valid for a short time, so plan to complete the process right before you begin car shopping.

4. No Down Payment

You don’t have to have a down payment, but it is a good idea. Paying this deposit will lower your monthly repayments and the interest paid over the life of the loan. If you are able to come up with the money, then a down payment is highly recommended.

5. Focusing on the Monthly Cost

If you are focusing on the amount you will have to pay monthly for your car, you could be putting yourself in a position to pay more. Look at the overall cost of the car from start to finish. Lower monthly payments may sound nice, but they may prolong the loan term which means you’ll be paying more in interest. Also review any extra charges added to the total, which may include items like dealer delivery fees and stamp duty.