If you're buying a car from a dealer, there are several things you can do to make sure you get the best deal: make sure you know what you want before you go to the dealership; know the value of your trade-in; if possible, know the dealer's cost on the car you're interested in before you start. In addition, you can start the negotiation in a much stronger position if you already have financing in hand.
Get a loan before you go to the dealer
Unless they're running a promotion, a car dealership likely doesn't have the best interest rate on a loan for your car purchase. You can generally get a decent rate from your bank on a pre-approved loan, which means that you get the loan before you actually pick out a car. It helps to do some research ahead of time, since the bank will want to know roughly how much money you need in order to pre-approve you. If you are a member of any credit union, you should definitely check with them as well, because their interest rates are likely going to be even better than the bank's.
Negotiating the best deal
Having a pre-approved loan gives you a lot of leverage when you are buying a car. Car dealerships often make a great deal of their profit not from selling you the car, but on the loan terms they talk you into. Dealerships will often try to talk you into a loan with an interest rate greater than 10%, which is definitely worse than the bank or the credit union will offer you. But even better than that, having a pre-approved loan means you're in a position to buy right on the spot. You can walk into a dealership, point at a car and say, "That's the car I want and this is what I want to pay." If the dealer won't take your offer you can take your pre-approved loan elsewhere.
Getting a loan online
There are numerous places to find a loan online:
And many banks offer online loan applications:
Getting a loan online can be simple and easy, and it lets you shop around quickly. It's still possible that the dealer will have a better loan, in which case you can use that loan and give up your pre-approved loan. Always check the fine print to see what fees and charges might be hidden in your loan. You can use the calculator on Odometer.com to determine the actual monthly payment you'll have to make. Knowing when you walk into the dealership that you're ready to buy the car you want puts you in a better position to get the deal you deserve.