When looking for a new car, the worst part of the whole experience is often the financing of your new vehicle. Very few people have the money to pay cash for a vehicle, so they turn to an auto loan for the purchase. The whole financing process can often be more stressful than the search and the salesman negotiations.

When you apply for a loan, it is best to be prepared and know what to expect. Getting the best terms on an auto loan requires more than simply financing through the dealer. You should always take the time to shop.

The best way to get a great auto loan is to have steady income, a good job history and a good credit history and score. You may have an advantage if you are dealing with a bank, credit union or lender that you have a positive relationship with. This means that you haven't overdrawn your account and have paid your loans on time.

What seems to make the entire finance process more difficult is the number of lenders out there and the number of options available. But once you start to shop around you will begin to notice that some of the options are good, while others aren't.

It is important to find the best loan possible for a number of reasons. The lower the interest rate, the lower your monthly payment and the less you pay back over time. There are some loans out there that aren't what they appear. There are many that will leave you upside-down in your loan — owing more than the vehicle is worth. Some even come with prepayment penalties, which leave you unable to sell or trade the vehicle without having to pay a penalty.

The main idea behind a great loan is that it is the lowest rate you can possibly get and the shortest term you can afford. Don't stretch a loan repayment out to 72 months if you can afford 48 months. The longer you stretch it out, the more you are simply paying towards the interest. Really look at what you can afford. Look at the monthly payment and the total amount you will repay.

If you belong to a credit union, they often offer some of the lowest rates available. Call your local banks. You can even shop online. You will find some lenders with high rates, some with moderate rates and some with extremely low rates. Beware of anything that is too good to be true. Those extremely low rates often come with unfavorable terms.

Dealerships almost always offer loans. You shouldn't go into a dealer finance office without already knowing what rates and terms your outside lender is offering you. Tell the dealer that you have an offer of a certain rate. If he can try to beat it if he thinks he can. This gives you the power. The finance "guy" knows that you aren't just hoping for approval so that you can get that new car.

Take the time to shop for your auto loans. Be patient and don't jump into anything. Make sure that you read everything carefully before you sign. Taking a little time now means that you will drive away in a new car with a loan you can afford.