2009 Winter Auto Guide
Keys in the door of a silver car
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10 steps to your best deal on a car loan

6. Get the right tools. What's better for you -- super-low dealer financing or cash rebates? You can get a quick answer to that by using Bankrate's calculator. Within a few seconds, you'll know to the penny which is the better deal. Usually, it's the cash, says Giorgianni.

"Never take a car from a dealer's lot unless the financing is finalized."

7. Read the fine print. Take the loan paperwork home and read it before you sign anything, advises Massachusetts consumer attorney Yvonne Rosmarin. If a lender or dealer balks at that, walk out. This is a binding agreement that's going to last for years, so you need to know exactly what's in it. Some points that warrant special caution:

  • Mandatory binding arbitration: "It takes away your right to go to court for anything," says Rosmarin.
  • Variable interest rate: Figure out the highest possible payment. If you can't afford it, the loan's not for you.
  • Prepayment penalties: How much will it cost you to pay off the loan early if you want to sell or refinance?
  • Is everything the lender promised in the contract? Oral promises are hard, if not impossible to enforce, says Rosmarin. If there's something missing that's important to you, don't sign until it's included. If it's work that's promised, don't sign until it's completed.

8. Check the math. If the monthly payment is even slightly different from your calculations, the loan might not have the terms you think you negotiated. Use Bankrate's calculator to double-check.

9. Avoid conditional financing. Never take a car from a dealer until the financing -- down payment amount, interest rate, length of loan, monthly payments -- is finalized. If the financing is "contingent" or "conditional," they can change later and you could get stuck with less advantageous terms. 

10. Investigate your lender. "Check on anyone you're dealing with," says Rosmarin. Try your state attorney general's office and office of consumer affairs, the Better Business Bureau, as well as any government agencies (state or federal) that regulate lenders. Search online to learn what customers and former customers are saying. While you should take online comments "with a grain of salt," says Rosmarin, they can also provide an early warning to possible problems.

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