Practically everyone has to get a car loan at some point in their life. Many people who get car loans end up getting a less than fair deal. They're saddled with high interest rates and may end up defaulting on the loan. When that happens, their credit score is negatively affected.

It doesn't have to be this way. Everyone can get a good car loan that is affordable. The key to doing so is to know how to negotiate with dealers and how to get a loan.

Negotiations

Before determining how much of a loan you'll need for your car or truck, you should first try to get the price as low as possible. To do this, you'll need to master a few negotiation skills. That's because the salesmen you'll encounter are all trained to sell their vehicles for as high of a price as possible.

The negotiations process is covered more thoroughly in another of our articles, so we'll just summarize here.

1. Research the true value of the car. This is especially the case with used vehicles. You want to make sure you know what you're talking about when you go in there.

2. Look at the car prices for the same vehicle at other dealerships in the area. You can point out any price differences to the salesman and possibly talk down the price.

3. Be firm about your price. Do not be swayed by the salesman and his talk. Let him know up front how much you're willing to pay. Don't budge.

4. Get up and leave. If the salesperson won't give you what you want, thank him for his time and walk away. In most cases, he'll follow you and give in to your wishes.

Getting the Loan

Now that you know how much money you'll have to borrow, it's time for you to go loan shopping. The loan shopping process may be very quick and painless, or it may take a bit of time. In either case, you should be able to get a good loan.

Go Through the Dealership

Sometimes the best loan is the one offered by the dealership's finance manager. Before searching for alternative loans, you should first get information on the dealership's loan-how much the interest rate will be, what the payments will be and how long the loan will last. Keep this in mind as you go forward with your search.

Other Sources

Sometimes you won't get the best deal from the dealership. That's why you'll want to check out the local credit union(s) and bank(s) in your area. Get information about loans from them.

You'll also want to go online and check for potential car loans. The online loan market is extremely competitive, so lenders may be willing to give you a really great deal on a loan just to get your business. Try applying for several different loans online. Make sure that you apply for loans from only legitimate companies-there are a lot of scams on the internet. You'll want to research each company first before applying.

What Next?

After you get all the quotes back from the dealership financier, local credit unions and banks, and online companies, you can then evaluate each one and pick the best deal. You'll want a loan that is low interest and can be paid off within 10 years. You'll also want one that is somewhat flexible when it comes to the payment schedule so that you won't get huge late fees if you miss a payment or two. It is important to read all of the fine print before signing-up for any loan. You don't want to sign-up for more than you bargained for.