Buying a car can be a tedious process. Not only do you need to research the different makes and models, but you will also need to determine how you will pay for this new vehicle. Cash is ideal because you will not need to worry about long term payments and interest charges that quickly add up. If you are like most people who do not have the cash available, financing is the next best solution. Before you sign on the dotted line for an auto loan, use these tips and tricks to ensure you get the best deal possible.

Check and Improve Your Credit

Once you are in a dealership, sales professionals will do whatever they can to run a credit report and get you financed. If your credit score is not up to par at that time, your approval will be based on a higher interest rate. The higher your interest rate, the higher your monthly payment will be, so it is best to check (and improve) your credit score before walking into the dealership.

Known as super prime, a credit score of between 781 and higher will earn you the lowest rate possible. If you have credit score between 661 to 780, you will be approved at a prime rate, which also work for most people's budgets. However, if your credit score is 660 or lower, consider waiting to finance a vehicle because your interest rates and monthly payments will be higher.

To improve your credit score, pay off any collections or past due accounts. Also, pay down balances on credit cards even if they are good standing. Decreasing these balances will positively affect your debt to net ratio, which will give your credit score a boost.

Research Financing Deals

There are a few different ways to research financing deals. To get started, you should research special deals being offered by specific manufacturers.

Manufacturers may be offering a 0 % rate on a specific model of vehicle. Be sure to read the fine print on these deals, since these special offers may not allow you to take advantage of both the promotional rate and rebates.

Of course, you do not have to finance the vehicle through the manufacturer's loan department. Contact your bank or credit union to see if they have any special offers for their customers. While surprising, your personal bank or credit union may offer you a better rate.

Choose Shorter Instead of Cheaper

The interest rate is an important factor to consider when applying for your auto loan, but you must also take the loan's term into account. Financing your vehicle for a longer term, such as 72 months, will allow you to have a smaller monthly payment, but the longer loan may end up costing you more in the long run.

The longer you finance your car, the more interest you will pay, but that is not the only negative associated with longer auto loans.

New cars depreciate an estimated 22 percent in their first year. In most cases, you will be upside down, meaning you will owe more than the car is actually worth. Building equity is difficult in a new car, but building equity while financing and paying interest will be virtually impossible.

To reduce total interest charges and protect or build equity, consider financing your car for a shorter period. If you are able to afford the monthly payment, most experts suggest financing for 48 months instead of signing on to a 60, 72, or higher loan term.

Buying a car does not have to be a financial hurdle. With these simple tips, you can finance your new vehicle in an efficient and affordable manner.