Where to go to get an auto loan can be challenging. Most of the time, car dealers will want you to finance through them, which limits your options. With the offers below, you can get a check good for a certain amount or approved up to a certain amount, and at that point, you have the power to negotiate or shop around.

There are 4 types of car buyers:



Things to Notice:

Pay close attention to everything. Look for key words like "trade allowance" - this is not the actual value you are getting for your trade in most cases. Trade allowance is typically what your are getting for your car plus some extra money deducted from the sale price. In other words, the dealer will take some extra cash in the marked up sale price and transfer it to your "trade allowance" making it look like you are getting what you want for your trade.

Lets say you are trying to work out a deal; the car you want is listed at $30,000. You want to get $10,000 for your trade and a decent interest rate, plus you have $5000 for a down payment. The salesman writes your contract up as so:

• $30,000 - List Price
• -$1,000 - Discount by Dealer
  
• $29,000 - New Sale Price
• -$10,000 - Trade Allowance
• $14,000 - Total due
• + TAX
• + Tags
• -$5,000 - Down Payment (cash down)
  

Seems like the deal you wanted at first glance, but the discount is only $1000 and typically (but not always) there are several thousand dollars (6000+/-) of mark up. So why the small discount? Well, usually it's 1 of 2 things, like: they've added some of their mark up into your trade allowance, which means you're not really getting 10k for your vehicle (this is usually the case), or they may be trying to make a nice profit off of you. The key thing to remember, car dealers have salaries, commission, insurance, and other overhead, so you shouldn't expect them to give the new vehicle away. However, you do not want to be giving away potentially several 1000s of dollars to them either. The best thing to do is some homework. Also, be weary of the first interest rate you are offered, many times a dealer will "bump" your rate a quarter percent or even more. This is commonly called back-end money. So if the bank they submitted your credit application to offered 6.5% (to the finance manager) the finance manager can "bump" your rate to 6.75% or more. The bank then pays the dealer a commission on that "bumped" amount. The bank was willing to go for 6.5% so they are more than happy to instead have you at 6.75+%.

A few things to try, first work out a sales price, then say: "I also have a trade in" - If you have noticed, a good salesman will always ask if you have a trade-in fairly early on. It's unethical to tell you to lie, so we won't, but tell them you are thinking about trading in your car or you may just try to sell it yourself, if the salesman asks. You probably would end up doing that anyways, if they weren't willing to give you a fair offer for it...

When they come back to you with your terms, as long as it fits what you were looking for, tell them "it's a deal... if you get my interest rate down a quarter percent."

Another idea, tell them you do have a trade-in, but the only thing you want to work on right now is the sale price of the new or newer vehicle. After you have an agreed upon sale price, then work on the trade-in price. Once you have those 2 variables worked out, work on getting the interest rate lowered. 1 last thing to keep your eye on - your contract. Make sure everything is what you agreed on. Something like the term could be over-looked. You don't want to be paying for 72 months if you thought you were signing up to a 60 month term.

If you do those things, you may just have yourself a good deal. Remember a good deal is only a frame of mind. What seems like a good deal to you may not to some one else, but if you are happy with the deal you got - we're happy for you!