Auto Loan Tips:

 
• Buy it used – We’ve all watched friends buy a brand new car. They are really excited about their purchase…for a few months. After a year or two, they usually complain about their high loan payments. Don’t make the same mistake! Buying a used car, even if it is just a year old, can help you save big. A new car drops in value dramatically as soon as you drive it off the lot. Plus, used cars these days can come with warranty and service packages, just like a new car. If the car you want isn’t available used or comes with a 0% APR offer, buying it new may make sense. 
• Research prices online – Buyers have the upper hand now that they can easily research prices and features of cars online. Before you go to a dealer, investigate the blue book price, MSRP, and other details of the car you are interested in buying. Print out these documents and take them with you. When a salesman tries to offer you a high price, you can use these facts in the negotiations. You can also apply for no obligation auto price quotes from dealers in your area using this online service. 
• Order a CARFAX report – Most sellers will give you a free CARFAX report for the vehicle you are thinking about buying. If not, go online and order one yourself. This $20 report will show you how many owners a car has had, where it’s been located, if it was in an accident and other “lemon” indicators. It is especially important to check out a car’s history, as recent floods in the south have put a lot of damaged cars on the market. 
• Check your credit – Reviewing your credit standing before you start to shop for a car can help you save big. If you have a high credit score, you may be able to qualify for the dealer’s special financing offers. You’ll also have extra bargaining power when negotiating a deal with a salesman. If your credit score is low, work on improving it for a few months before your application and take extra time to shop for the best loan offer. 
• Save on financing – The cheapest way to buy a car is in cash, but there are also ways you can save if you buy with a loan. Put down the largest down payment possible and choose the shortest-term loan in order to reduce your loan costs. Compare loan rates from banks, credit unions, and online lenders by using their free calculators. Once you’ve found the best deal, apply for the loan and take the financial paperwork with you to the dealer. You’ll usually get a much better rate through a bank or online lender than from the dealer’s financing office.

Bad Credit Loans - If you're considering taking out a bad credit loan, look out for some of the following pitfalls.

 
• Late Payment Increases - Rather than foreclosing on your loan when you are habitually late or missing payments, some lenders now increase your interest rate as a late payment penalty. Of course, you should be making your payments on time anyway, but look out for these late payment increases as they can cost you a lot of money. 
• Prepayment Penalties - Many bad credit loans want to make sure you keep the loan for a minimum period of time. They will institute a prepayment penalty, or fine, if you pay the loan off sooner than they want you to. In some cases, these prepayment penalties are only for a matter of months or 1 or 2 years. Be wary of these penalties and make sure you know when yours is up if you must have one to secure your bad credit loan. 
• Balloon Payments - A balloon payment is when you have low payments up front, only to have a huge payment at the end of your loan term. If you are prepared for this, this kind of program can work very effectively, but if you are ill prepared you can get yourself into serious trouble, so be aware and plan accordingly.