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If you've read Lease or Buy a Car, you now know the differences between car lease vs car buying. If you answer is car buying, this article will provide you with some tips to get the best car financing deals.

Assumed that you have a car in mind that fits your budget and you are ready to buy new or used, chances are that you would be financing it because paying cash is just not in the realm of possibility for most people. There also are other wiser investments with better return rate then spending your hard earned cash on a new car. But there are certain scenarios when you may consider paying cash, like your credit rating makes you pay a high interest rate to finance or you are in debt and try to avoid further damaging your credit rating. If you are not in those situations, your car finance options are as follow.

• Dealership - convenient & fast
• Bank or credit union - competitive rates, personal service
• Online financial institution - competitive rates, self served
• Home equity loan - competitive rates, may deduct some interest from your taxes
• Family member - easy & flexible, but could jeopardize a relationship

When shopping for a car, after battling with salesman for the best price of the car, it just feels right that the next step is heading to the finance department of the dealership because it is convenient and you are there already. Most of the time, if you are in good hands, the dealership will take care of you by providing the most competitive rates. But how do you know you are getting the best car finance deal? With the understanding that the car finance rates are determined by your credit scores, the length (term) of the loan, your geographic location, newest of the car, there are some tips to help you get the best finance deals before stepping on the car lot.
  

1. Once you know which car model you want to purchase, be prepared with at least one quote from a Bank or a credit union and one quote from online financial institutions. Bank and credit union is often a good option: they provide personal service, offer competitive rate because most likely you are already their customers. If you don't want to deal with any representative, you can try online services like RoadLoans.com or myAutoloan.com. It's fast, free and no obligation to purchase. It would take you around 5 mins to complete some simple forms to tell them your personal info, credit history and the car you are going to buy, they will then reply with a quote. The whole process is very straight forward. When you have 2 quotes in your hands, you are ready to go the dealer and negotiate the best price of the car with a salesman.
   
   
2. After battling for the best deal with the salesman, the salesman will take you to their finance office to close the deal. Please note, the finance officer or manager will try to upsell you many add-ons AFTER you've agreed to a price for the car with the salesman, i.e. extended warranties, paint coating protection, rush protection, tire protection, alarm systems like lo-jack or Phantom, etc and they would push as hard as they could be because they are often the most profitable items for the dealer and the finance person gets commission from the sales of the add-ons. While some add-ons do provide good values; you need to decide whether those add-ons fit your needs and budget despite of the high pressure from the finance officer. Most of the time, you can purchase those add-ons from third party for a way cheaper price.
3. Next, See the rates the car finance officer offers you, if they are not as competitive as the finance options you got from your bank or credit union and online institution, you can then mention to them that you have gathered other more competitive quotes from other source.  (you are not required to tell them the source, but they may want to know.) The idea is to try to have the dealership be competitive and offer better rates to beat the quotes on your hands. The fact is sometimes the dealers may have special promotions like rebate & incentives, 0% APR, and other special promo programs. Ask them politely to explain how those promotions will be applied to the deal and what your monthly payment is with the interest rate if you use their finance service and if you take the finance elsewhere. Then compare the total cost of loan (monthly payment x length of the loan.) Don't be threatened that if you take the finance elsewhere that you will not qualify for the incentives; read the fine print about the incentives as some of them aren't required you to finance with the dealer. But some 0%APR promotions do require you to go through their finance institution. After all, the matter only comes down to how much you are paying for the total cost of loan.
4. Final tip, be nice and polite when working with them. The salesman and the finance officers are selling cars to make a living while you are just making sure you get the best auto finance deal. If you don't like the numbers you see and things doesn't seem to work out, it is advised to kindly thank for their service and walk away from the table, chances are you will hear back from the dealer the next day that they have a better deal for you.