In getting a car loan, there are a number of aspects that you should look at with vigilance lest you end up paying for nothing. First, before taking a car loan, you must have a clear idea on the prevailing rate in new and used car loans, depending on your choice. You need to keep a close watch on the Annual Percentage Rate or the APR. This will help you compare the interest rates of different lenders, provided these lenders have the same payment duration also.Most are of the opinion that credit unions give the best deals because they offer lower rates as compared to typical banks because they are usually non-profit although they are also available mostly to members only.



Second, you need to know that proper timing is of the essence. Basic rules tell you that you need to shop when it is not in the prime time or weekend and thus do the shopping early in the week as they are more accommodating to your deals on these days. Also, it can be helpful to get the shopping done at the end of the month since most dealers give the best deals at that time, because they also get bonuses if they sell more. Also, choose cars that are to be replaced with newer models even though they just got into the market recently. Say for example in the early of 2009, shop for the 2008 models.





Finally, figure out how much you need to borrow versus how much you can afford. A standard rule of thumb is that you should make sure that your monthly car loan re-payment does not exceed 20 percent of your monthly income. Then, you should also decide on how long you should be paying for your car. Of course, the longer the payment term, the lower your monthly installment is, but it also means you will pay interest for longer as well.