Buying company quite expensive and each investment to make, so knowing exactly what you can expect and what to look for certainly help you to secure the best deal. Here’s what to look for when taking out a car loan.

Lenders

Car buyers borrow money from three primary lending sources: banks, credit unions and automakers. Loans from any of these sources may come through the dealer, who often serves as the middleman and takes a cut in the process.

Getting a loan through a car dealer is not, however, automatically more expensive. In fact, dealers provide the only way to get specialized low rates, including zero-percent financing, from automakers.

Car dealers borrow money at wholesale interest rates, which they then mark up and pass on to you. Because the dealer’s rate is lower, the rate you get may be no higher than one you arranged yourself. Still, the only way to make sure of this is to know what your best rate is before you get to the dealership.

New or Used?

In general, new-car loan rates are better than used-car rates. Usually, only new cars qualify for zero-percent financing, though some automakers occasionally push certified pre-owned stock with zero-percent offers. In general, the older the car is, the higher the interest rate is.

Term Length

Sign up for the shortest term length you can afford to keep your total interest lower; the longer term you have for a car loan, the more you’ll pay in interest.

The average term for a new-car loan is more than 60 months now, and this leaves consumers vulnerable to owing more on a loan than their car is worth, a condition that’s often referred to as being upside down or under water.