Shop for a loan before buying a car.

• Decide the amount to be borrowed and the number of monthly payments. Remember that, in general, the greater your down payment (and lower the amount borrowed), the lower your loan rate. Also remember that the shorter the loan term, the less interest you will pay. For assistance saving for a larger down payment, click here.

• Shop around, using the internet or Yellow Pages, for the least expensive loans. Regardless, make certain to call your bank or credit union for a rate quote before talking to a dealer about financing.

• If all lenders quote you a rate above the typical one, you are considered an above-average credit risk. If your credit report, and related scores, are accurate, then you should consider delaying the car purchase until you have successfully raised your credit score.

If you still want the dealer to finance your car, negotiate.

• The dealer may quote you a rate above the rate reflecting your credit risk (the “buy rate”). If this rate quote is above that quoted by your bank or credit union, it is probably “marked up.” Ask the dealer for your “buy rate.” If it is not provided, consider using another source to finance your car purchase.

• The Federal Equal Credit Opportunity Act prohibits discrimination in finance charges based on race, ethnicity, sex, or martial status. Make certain the rate you pay reflects your credit-worthiness, not one of these factors.

Finally, remember there is no 3-day right to cancel on car or car financing sales. Be sure you want the car and understand the terms before signing a contract. Do not drive the car off the lot until financing is final.