If you must finance your used car (I don’t recommend doing this), get your financing approved before you go looking for cars. There are several different lenders who can provide funding for a used car loan. Banks and credit unions usually offer lower rates than dealerships do, so don’t use in-house financing unless you get a special deal or unless the in-house interest rate is very competitive. Also, make sure your credit is approved before you leave the dealership. Banks and credit unions will usually finance a car only if it is less than five years old; however, auto dealerships will finance basically any car.

When looking for a lender, it is important to consider the maximum length of the loan. The good news is that most banks offer sixty-month programs for late-used car models, or cars that are less than five years old. However, the older the vehicle, the less likely it is to run without problems for the full sixty months. In general, banks offer shorter-length loans for older vehicles because older vehicles are not good collateral for loans.

Regardless of which lender you choose, make sure you understand exactly what you are getting into before you sign a loan contract. Once you have signed, you have committed yourself. Once again, you should know your credit score before you attempt to get a loan. If you know whether or not you have a good credit score, a dealer will not be able to insist that you need a higher interest rate because of your poor credit. Knowing your credit score will give you greater freedom to choose a lender that offers a lower interest rate.