If your old truck is covered in rust, if your compact car has stranded you more than once or if you just need a change from your current transportation, now is the time to shop for a car loan. Here are a few tips to get you the best financing deal on that new or used vehicle.

1. Apply with various lenders.

Virtually all dealerships have a financing relationship, and they want you to use this inside source. Sometimes you can get a good deal through this process, but you have to watch out for scams. Make sure you check out the offerings at credit unions, banks and online specialty lenders first. If you already know of a lender you like, read through the institution’s car loan terms. You can always walk into the dealership with several financing offers ready to go. Keep in mind that multiple inquiries usually hurt your credit score, but if you apply for numerous auto loans within a 14-day period, they will be counted as a single “shopping” inquiry on your credit report.

2. Get preapproved before going to the dealership.

Imagine how heartbroken you would be if you walked onto a car lot with no idea how much you could afford, fell in love with a convertible, got all the way to a financing rep and could not make the deal work out. Now, imagine the same scenario but with a blank check in your hand. By gaining bank preapproval, you will know exactly how much you can spend before you make the tough decisions. You can also see if the dealer’s finance department can match or beat the terms you already hold in your hand.

3. Shop for a low APR.

The rate of interest you pay on an auto loan is known as the APR, or annual percentage rate. Auto loan interest rates can vary between zero percent for the very best customers, four percent for buyers with really good credit and 20 percent for people who need bad credit car loans. By shaving just a few percentage points off your loan rate, you can save hundreds over the life of the loan. When you are investigating auto financing, know that you will probably pay a higher interest rate on a used car loan than on a new car loan.

4. Make sure payments are affordable.

After you narrow down the loan terms and the APR, then you can focus on payments. Experts recommend spending only about 10 to 20 percent of your monthly budget on all your loans and credit cards together. If you make $3,000 per month, your maximum car payment should be between $300 and $450. Keep in mind that you still have to pay your rent or mortgage, afford groceries, pay down student loans and enjoy a night out every once in awhile. You must also have enough cash left in the bank to pay for car insurance, repairs and gasoline.

5. Walk away under your terms.

Never stretch your loan period to make payments more affordable. You will end up paying more for the car and feeling like you have to drive it forever. A six-year auto loan may get you into a really nice vehicle today, but you will regret the decision when you want something different a few years down the road.

Buying a new vehicle is an exciting time, but go through the process step by step. When you take the time to shop for the best car loan deal and arrange manageable financing, you will enjoy your purchase even more.