A critical success factor (CSF) for purchasing a vehicle is to do your homework regarding your credit history and auto loan interest rates. Do not go into a dealership show room without being armed with this knowledge. This is particularly important if you do not have excellent credit.

The worst mistake you can make is to buy a car on the spot and rely solely on the dealerships financing. For dealerships, auto financing provides a significant source of their profits and the deal they offer will be with their best interest in mind rather than the consumer's.

You need to realize that once the price of the car is agreed upon, you have every right to obtain your own financing. If your credit score is sub-optimal you may be better off shopping for a loan from lenders who specialize in these situations. Don't let the dealership pressure you into using their financing department. If they do insist that you use their financing, you have every right to walk away.

While the interest rate is the primary variable in the monthly payment calculus, you must also focus on the term of the loan. For example, a loan that is extended out five years or 60 months, will have a cheaper monthly payment that a loan for the same amount paid over a short term. For example, if a loan is offered at 7% for four years (48 months) and the monthly payment might be $200 (obviously depending on the purchase price of the car. A loan officer could offer a seemingly lower monthy payment of $180 that actually includes a higher interest rate. For example, a loan officer could charge you 8% but extend the term of the loan out to six years (72 months).