Don't go in reverse with car loans

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When buying a car, most people spend weeks - or even months - searching for the best car for their money.  Once they decide on the type of car they want, they spend another few weeks looking for the best deal. They check out different auto dealers and look into private sellers.  But one thing people tend to forget about is the auto loan. If you get a great deal on the auto, it only makes sense to want the best deal on the loan, too. Here are some tips:

Don't sign up for a dealership loan Come prepared and have financing already in place before stepping foot into the dealership. Dealerships typically have higher interest rates and can even mark up those already high interest rates, costing you even more money long-term.

Get the shortest loan-term length possible The longer the term, the higher the interest rate. Most offer 0% financing on very short-term loans, such as two years. Some offer 0% on five-year loans though, so make sure to do your research. Note: Zero-percent financing is mostly for new cars only.

Don't buy too old of a car New cars depreciate the second you drive them off the lot. That being said, the older the car you buy, the higher the interest rate on the loan. If you want a new car make a significant down payment so you are not upside down on the car value once off the lot.

Improve your credit The better your credit rating, the better interest rate you're going to get. Pay down credit cards, always pay on time and dispute or pay off old accounts that have gone into collections.

Shop around Check out different banks, credit unions, dealerships and websites. Ask questions about late penalties or potential hidden fees.

Work quickly Every time you apply for a loan, your credit score goes down. Though it doesn't go down significantly, it can add up - especially if your credit is less-than perfect to begin with. Keep in mind that you can apply for as many loans as you'd like as long as it's within a two-week time period. If every application falls within the same two weeks, your credit is only hit once.

Do your homework Take the paperwork home and read all the fine print. Know exactly what you're getting yourself into before signing anything.

About the Author: Sarah Brooks is a freelance writer living in Glendale, AZ with her husband and daughters. She writes on personal finance and small business.