1. Shopping without knowing your credit standing

Your credit score will be the primary factor in determining your loan terms. Make sure there are no surprises that could lead to less favorable terms.
How to avoid: Getting prequalified is the best way to know what you can expect for financing terms. A good credit score may also help you qualify for special offers.

2. Not shopping around for financing

Many buyers turn to the dealership for financing. But beware. The dealer’s rates may be higher and include an additional markup. 
How to avoid: Shop around. Try a credit union, an online lender, and, of course, AAA to see if lower rates are available. 

3. Letting the dealer know your desired monthly payment

Telling the dealer what you can afford may seem like a good idea. But once you’ve disclosed your monthly maximum, a dealer could use that information to fit in things like higher rates and excessively long terms.
How to avoid: Conduct your own research. Use online payment calculators to learn how much you can afford. 

4. Hastily choosing between a cash rebate and low interest

Manufacturers may give you a choice between a cash rebate and low-interest terms, but the wrong choice could cost you over the span of your loan.
How to avoid: Take the time to calculate which promotion will save you the most money in the long run — and beware of hidden fees.

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Products offered by Auto Club Trust, FSB. Member FDIC. Equal Housing Lender.