A car loan is a significant financial agreement. You have to be extremely careful about how you enter into it. All options need to be considered carefully, and you need to know and understand all the details before you take the loan. To make sure you don’t miss any vital details, you should even make a checklist of things to consider when you’re out loan shopping. 

First, Go to Your Bank

It’s very likely that you will get the best car loan offer from your bank or your credit union. Banks often offer the best deals to people with excellent credit, but credit unions can be more accommodating. If you get a good preapproved offer even before you step into a dealership, you’ll be in an excellent negotiating position to get the best price for your new car. 

Second, Head to A Licensed Dealer

Large auto manufacturers like Ford, Honda, and Toyota usually have their own financial setups to help people with car loans. To get access to these loans, you will have to shop at a dealership that’s part of the manufacturer’s large network. Remember to ask for a loan from the financing company directly, like Ford Credit. Be clear and firm about not wanting to deal with third-party lenders. 

Finally, Know the Total Loan Cost

Take the time to understand what different APRs and different loan durations can cost you in the long run. A lower monthly payment over a longer-term with a slightly lower APR can mean that you will pay more overall. Whereas a higher monthly payment with a slightly higher APR but a lower term can save you a few hundred dollars and get you debt-free sooner. You need to work out the monthly payment you can afford and if it makes sense for you to pay more over a few years. 

Remember to ask about things like early prepayment penalties. Ideally, there shouldn’t be any. When you shop for loans, do it in the same two-week window to minimize its impact on your credit score. And before you sign for the loan, look up the lender’s reviews with the Better Business Bureau.