Once you have shopped around and find a car you are willing to purchase, it’s time to begin the actual buying process. This can be a very stressful situation for any customer but especially for first time car buyers who may not know what to expect. Dealers and salespeople will inevitably try to talk you into signing a deal that you really cant afford and that may put you into debt later on. To avoid this, keep in mind these very simple tips that will help you avoid a potentially sticky situation.

We hear them all the time, those ads on TV that are promoting special sales, incentives and rebates on cars at certain dealerships; and while yes, they are trying to encourage business, these deals can actually be quite beneficial to a first time car buyer. Depending on the nature of the sale, rebates and incentives can do a number of things for the customer including reducing purchase price, replacing a down payment or even lowering the APR percentage to save you money on interest. To find these deals, keep an ear open while you watch television and listen to the radio. Dealerships advertise these incentives heavily, so if you hear one that piques your interest, write down the name of the dealership and it’s location. You can then go online to that dealer’s website and print out the ad details to take them with you to the dealership. This will prevent the sales people from denying the validity of the incentive when you ask about it.

When you go through the process of purchasing a vehicle, your credit scores will be a very important factor. If you have a good credit score (680 or higher) you will most likely be offered the lowest interest rates and payments available. For those with decent credit scores (600-680) you are looking at slightly higher interest rates and payments. Bad credit is considered to be any score below 600. People in this bracket may or may not be approved for a car loan, depending on the lender. For those that are approved, the interest rates will tend to skyrocket somewhere between eighteen and twenty-one percent, which is a large jump from the four to ten percent that persons with good or average credit would pay. Persons who are not approved for a car loan also have the option of purchasing the car with the help of a cosigner. Entering into a car loan with a cosigner can be a big help to persons with bad credit or no credit because not only can it help lower the interest rate on your vehicle but making payments on time can help raise your credit score.

It’s important to know that when you purchase a car it will be required of you (in most cases) to provide a down payment on the vehicle. Paying all that you can upfront on the car will lower the balance that you owe on the car and will also decrease the amount of interest you will pay on the vehicle over time. It is recommended that  you never purchase a vehicle unless you can put up at lease 20% of the cost as the down payment. Paying a larger down payment will help to keep the length of your loan under four years which will keep you from owing more than your car will be worth as it depreciates.

Keep these tips in mind as you apply for your car loan and make payment arrangements with the financial department of the dealership. While some dealers are ethical and helpful, the majority are not looking out for you’re best interests, so it’s up to you to make sure that you don’t get ripped off.