When it’s time to buy a car and you need to finance, be sure you’re aware of the top 10 auto loan mistakes – so you can avoid them.

1. Not shopping around. There’s simply no excuse to not do your homework. If you want to lose hundreds and even thousands of dollars over the course of your auto loan, then don’t bother to check out the best auto loan rates out there. But if you’re serious about getting the best deal, do your research. Those who don’t soon wish they had.

2. Not checking your credit first. It’s such a simple concept, and yet people consistently fail to realize that people with the best credit obtain the best auto loan rates. Even if you’re not at the highest credit score, however, you can still snag lower auto loan rates by ensuring that your credit history passes muster. Clear up any errors right away. If you need time to improve your credit score, give yourself a minimum of six months to get back on track – before you shop for an auto loan.

3. Failing to be honest. Some people think they can fudge a little on the auto loan application and it won’t come back to bite them. Don’t be tempted to do this, as credit and other checks will soon ferret out your little white lies or failure to disclose. Even if the auto loan company decides to give you a quote, it may very well be higher than if you’d been honest.

4. Settling for anything because you’re in a hurry. You never should shop when you’re hungry. By the same token, you should never take whatever auto loan is out there – perhaps by a dealer anxious to hook you into a captive-finance deal – because you’re desperate to finance your car purchase. You should always be willing to walk away. If not, you’re just being a sucker – or, at the very least, an unknowledgeable consumer.

5. Not figuring out your household budget. Do you really know how much you can afford in the way of a monthly car payment? The only way to know this is to sit down and figure out your household budget. Buying a car and financing it smartly isn’t just done on a whim. You need to know exactly how much you can spend comfortably each month.

6. Not putting down a big enough down payment. Too many buyers make the mistake of not putting down a big enough down payment. This means they’re financing more than they need to – and paying a higher rate to do so. Putting 20 percent down can lower your monthly auto loan payment considerably.

7. Going for 60 to 72 months. This is a mistake that is understandable. Buyers are concentrating so much on the monthly payment that they look at the affordability of that 60 or 72 month option. While it may be easier on the wallet, in the long run you are paying thousands more in finance charges and interest than you would with a 36- or 48-month auto loan.

8. Going for too much car. Buying a car is often an emotional decision and, as anyone who understands human emotions knows, relying too much on emotion isn’t a good thing. Avoid the temptation to go for too much car, something that you really can’t afford. You’ll be in over your head and quickly wind up behind in your finances.

9. Giving in to dealer add-ons. The salesperson at the dealership makes money on all the little add-ons the dealer sells. It’s not in your best interest to be talked into extended warranties, undercoating, upgraded this or that. Stick to what it is that you came in for and don’t be persuaded otherwise.

10. Not getting pre-approved for an auto loan. We’ve saved the best (or worst, depending on your point of view) of the top 10 auto loan mistakes for last. If you walk into a dealership without first having gotten pre-approved for an auto loan, you’re just a lamb going to slaughter. You have no other choice than whatever the dealer’s finance people can dredge up for you – and guess where that will leave you? Always obtain a pre-approved auto loan before you go to the dealership. This gives you leverage and you can negotiate anything the dealer may have to offer so you get the best deal.

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