Car buying can be exciting, stressful and expensive. In addition to finding the right car for your needs, you also want to stay within your budget. Whether you love or dread car shopping, the following tips will help you save money during the process.

1. Shop Around for the Best Interest Rates

A quick look at how interest rates affect your monthly payment reveals the difference a percentage point or two can make on a new car. After all, with vehicle prices of $40,000 or $50,000 common, the interest rate could mean savings of thousands of dollars over the repayment term.

Since many new car purchases are financed, it only makes sense to shop around for the best possible rate. You can start with your current bank, but don't overlook others — or even online lending services. Some banks even offer discounts or programs like a customer car buying service that can save you even more.

2. Check Into Dealer Incentives and Discounts

Once you have an idea of your interest rate, you can start shopping around. Check into available incentives and discounts. Most major auto manufacturers offer these throughout the year, so if you know a special is coming, it might be a good idea to wait on your purchase.

Don't limit yourself to one or two automakers just because they have a solid reputation. Find a few cars that fit you and are in your price range, and then research their reliability and owner satisfaction to make an informed decision. This could save you thousands of dollars when dealer incentives are figured into the picture.

3. Ask for Insurance Estimates

A significant cost that many car buyers overlook is insurance. After your purchase, you'll be paying to insure your new vehicle for years. If you choose one with a low safety rating or high theft statistics, you could pay significantly more than you need to. Over time, that can add up to a considerable amount of money you could have put toward a more comfortable or reliable car. It's a good idea to get an insurance estimate before you make a purchase.

4. Fine Tune Negotiation Skills

Many people dread the idea of walking into a car dealership and facing the salespeople. They are generally known as a tenacious group that will try to sell you features you don’t need. However, just like every stereotype, many salespeople do not fit this mold. In fact, with many dealerships moving away from straight commissions, there is little incentive to try and upsell.

Instead, it is often smarter to build a relationship, so customers return for service, repairs, and their next vehicle purchase. You can use this to your advantage when purchasing a car. Be friendly and nice to dealer staff; it will usually get you further than a more aggressive stance.

5. Do Your Homework Before You Go Shopping

Pre-purchase research is easier than ever. So, before you even think about heading to the dealership, look into things like what the dealers pay for vehicles, what incentives manufacturers are offering, special financing rates and other perks.

Sometimes the same car can vary in price between dealers due to things like sales volume discounts. Other times, perks and bonuses make one seller look more attractive. For example, some dealers offer lifetime warranties on cars, which could help offset repair costs if you plan to keep the vehicle for a long time.

6. Be Smart About Trade-Ins

Finally, be smart about your current vehicle. Trading a car to the dealer has a few advantages. For example, you won’t pay sales tax on that portion of the vehicle price, which could save you significant money if you have a newer car. However, if your vehicle is older or has a lot of miles, then you may be better off selling it privately.

There are several ways to save money buying a new car. Look into dealer incentives, be willing to consider different brands, and look at hidden costs like interest rates and insurance to maximize your buying power.