1 of 11

Write now Article Tools

It's time that I came clean; I sell used cars.

Am I a greasy slime-ball a la Hollywood? No, but I've met my fair share, worked beside them, and most importantly, I've learned their tricks.

The good news is, there's hope for you! Armed with insider knowledge, you can negotiate like a pro, and drive away from any car lot feeling utterly victorious.

So here it is, your insider's guide to financing a car

Start by deciding what you do and don't need.

Even if you're not sure exactly what make and model you're looking for, putting your priorities down in writing will prevent you from dealing with buyer's remorse down the road. Key issues to keep in mind are fuel efficiency, seating capacity, mileage, warranty, cost of insurance, and last but not least, the amount of payments that you can comfortably afford.

Once you have at least a general idea of what you are looking for, you'll need to start thinking about an auto loan. You'll find lots of websites offering you car loan financing, online car financing, used car financing, and of course, bad credit car financing.

All these various companies are going to offer you similar products at similar rates, but with wildly varying degrees of service. So, when you first start shopping for a new or used car loan, consider applying first with your own bank or credit union. Your financial institution will be able to meet or beat the best rates offered by any other financier or dealership, especially if you pay your monthly payments out of an account that you hold with them.

Let's talk interest rates.

There is something called a "prime rate", which is the lowest rate you can get on a used car loan without buying your rate down. (YES, you can buy your rate down.) If you have excellent credit, you may qualify for the prime rate. The more risk you present to the bank, the higher your rate, and your monthly payment, will be. A higher interest rate also means that you will pay more total finance charges over the life of the loan.

When it comes to interest rates, new cars are in a league of their own. You'll see commercials on TV offering low or no finance fees, but remember that these rates apply ONLY to new cars; you will not be able to get near those rates on a used car. Usually, manufactures offer in house financing, and rates that are impossible to match anywhere else. In addition, you will most likely need to have exceptional credit to take qualify for the advertised rates.

A bank will decide to finance you based on a few key items

* Your

• 1
• 2
• 3
• next page >>

Add your voice

Know something about A guide to car financing?
We want to hear your view. Write now!