Shopping for an automobile can be overwhelming in and of itself. The prospect of securing a loan to pay for a new set of wheels is downright frightening. However, proper education and thoughtful planning can make the experience far less traumatic, as well as lay the foundation for successful vehicle purchases in the future. Here's how to get started:

Determine Your Budget
Begin with some basic number crunching. How much money can you afford to spend on a monthly car payment? The basic rule of thumb is not to exceed 20 percent of your net monthly income. It's important not to overextend yourself because, in addition to your other living expenses, owning a car is much costlier than a simple payment to the bank every 30 days. The combination of property taxes, insurance premiums, maintenance, and fuel can be expensive. If you spend too much on the purchase of your new car, you may not be able to afford to drive it.

Check Your Credit
What's your credit score? When was the last time you reviewed your credit report? Know your credit score and pull your credit report before speaking with any potential lender. AnnualCreditReport.com allows you to request a free credit report once every 12 months from each of the nationwide consumer credit reporting agencies: Equifax, Experian, and TransUnion.

If your credit needs repairing, try to put off your vehicle purchase and take steps to improve your standing. That will increase your chances of securing a lower interest rate on an auto loan. Learn more by visiting the Federal Trade Commission Credit Repair web site at http://www.ftc.gov/bcp/conline /pubs/credit/repair.htm. In addition, monitoring and reviewing your credit report on a regular basis is a great way to combat identity theft.

For young adults with little or no credit history, a first car loan can be a great way to build credit but be advised most lenders will likely require a co-signer.

Shop Around for Your Money
As an automobile shopper, you not only want to shop for the best deal on the vehicle itself, but you also should compare lenders'. Since different banks, credit unions, etc. charge different interest rates, it's wise to shop around to secure lowest interest rate on your auto loan. The lower the interest rate, the more you may be able to afford to borrow. Further, if you own a home, you may want to consider a home equity loan as a way to get the lowest possible interest rate. Secure approval for the loan before beginning

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