10 steps to your best car deals and loans

Bargaining over a new car is only half the battle: you still need a good car loan to make a good deal.

Bargaining over a new car is only half the battle: you still need a good car loan to make a good deal.

Here are 10 tips to help you get the best car deals and loans:

1. Separate the car transaction from the loan.

Before you start negotiating the exact car and price, apply for a loan from a credit union, a bank, a reputable online lending institution, or even your auto insurance company. "On the whole, we've seen that online banking is the best," said Anthony giorgiani, Deputy financial editor of the consumer reports financial advisor newsletter in Yanks, New York. "Small banks can be very competitive," he said. "Many of them are not in the credit crunch. Credit union rates tend to be 1% to 1.5% lower than banks, says Jim Hanson, vice president of the National Association of credit unions in Madison, Wisconsin.

2. Limit the time you need to buy car deals and loans to two weeks.

Every time you apply for a loan - whether you're approved or not, whether you use it or not - your credit score drops, making it a little harder to get a prime rate loan. But if you submit all your applications within two weeks, they count as one inquiry.

3. Be familiar with your own credit record.

stay www.AnnualCreditReport.com Get three free copies of credit reports from Equifax, Experian and TransUnion. If you want to know your exact score from three institutions, you can order them for a small fee from their personal website. The credit or FICO score you buy may not be the same as the one used by the lender, but it should be close. With a car loan, you have more leeway in terms of scores. "The value of a car loan is lower than the value of a mortgage," said Gail Hillebrand, a senior lawyer at the office of the San Francisco Consumer Federation

4. The purchase is the total amount of the loan, not the monthly repayment.

The only time you should think about monthly payments is when you figure out how much you want to spend on your car. After that, don't discuss monthly payments. Some lenders may focus on repayments, enticing you to borrow more by extending the number of repayment months. So they can earn more interest, and you have to drive your old car longer.

Don't make the best assumption.

The lending institution has no obligation to provide you with the best interest rate that meets the conditions. According to Josh frank, a senior researcher at the center for responsible lending in Durham, North Carolina, in 2007, car dealers increased their used car loans by an average of 1.8% and their new car loans by 0.6%. You're more likely to see a better rate. You can find the best car loans available in your area on bankrate's car interest rate table.

6. Use the right tools.

What's better for you - ultra low dealer financing or cash rebate? You can get a quick answer by using bankrate's car discount vs low interest rate calculator. In seconds, you'll know which deal is better. It's usually a matter of money, says giorgiani.

7. Read small words.

Yvonne Rosmarin, a consumer lawyer in Massachusetts, suggests taking the loan documents home and reading them before signing anything. If the lender or dealer hesitates, exit. It's a binding agreement that will last for years, so you need to know exactly what's in it. Special attention should be paid to the following points:

Compulsory arbitration: "it deprives you of the right to go to court for anything," Rosmarin said.

Variable rate: calculate the highest possible payment. If you can't afford it, the loan is not for you.

Prepayment penalty: if you want to sell or refinance, how much do you need to pay off the loan in advance?

Has the lender agreed to everything in the contract? Rosmarin said verbal promises are difficult to implement, if not impossible. If something important to you is missing, don't sign it until it's included. If it's a commitment, don't sign until it's done.

8. Check the math.

If the monthly payment is slightly different from your calculation, the loan may not have the terms you think you are negotiating. Check with bankrate's automatic calculator.

9. Avoid conditional financing.

Don't buy a car from a dealer until the financing - down payment, interest rate, loan term, monthly payment - is confirmed. If the financing is "conditional" or "conditional," they can change later, and you may fall into less favorable terms.

10. Investigate your bank.

"Look who you're dealing with," Rosmarin said You can go to the state attorney general's office, the office of consumer affairs, the Bureau of business improvement, and any government agency (state or federal) that regulates lending agencies. Search the Internet to find out what customers and former customers are saying. While you should be "dubious" about online reviews, they can also provide early warning of possible problems, Rosmarin said.