Shopping for a new vehicle can be difficult enough, but financing can add even more stress to the task. If you’ve found the car of your dreams but need to finance, there are a few basic questions about auto loans that you need to ask. Regardless of how pleasant the salesperson is, an offer that sounds too good to be true usually is. Don’t fall for just any great offer. Take your time, do your research and ask the right questions.

The true rate

When it comes to interest rates, make sure you know the true rate that you’ll be paying annually. Ask what the annual percentage rate, or APR, is to get a good estimate of what you’ll be paying on the loan balance. Not everyone will receive the same APR. Credit scores and other factors will determine the interest rate on any auto loans you are offered. To find rates near you, check out Bankrate’s rates tool.

Penalties on auto loans

Finding a great APR is rewarding, but read the fine print before you agree. Watch out for penalties that occur when paying off auto loans early and extra costs that might occur during the term of the loan. Keep an eye out for hidden charges as well. Don’t rely on the salesperson to inform you of these penalties; make sure you read the contract carefully before signing. Ask about penalties included in the loan contract, and then check it thoroughly yourself.

Third-party financing

Third-party auto loans that are pending can be detrimental to the pocket book. Don’t drive off the lot until the loan terms are completely settled. Dealers will occasionally let you take the automobile while they are still in the process of getting an approval, so make sure to ask if the deal is dependent on a third party’s approval. If your loan isn’t completely settled before you take the car, the third party could increase your rate. To calculate your loan, use Bankrate’s auto calculator.