Buying a new car is an exciting time, but before you begin choosing the car of your dreams, you’ll have to do something a little less fun: Get a car loan.

While getting a car loan is not the most exciting part of the buying process, it is the most important. That’s because long after the new car smell is gone, you will still be making monthly payments on that car.

To ensure those payments fit into your budget, it’s important to do your homework. You can start at, where you can get quotes from lenders around the country who want to compete for your business.

There are some rules for getting a car loan that apply in every situation, even for first-time car buyers.

1. Know Your Credit Score

Review your credit reports from all three credit bureaus. This way you know exactly what potential lenders will see.

If there are errors, begin the process of correcting those immediately. It make take several weeks to get those errors resolved, so it’s best to give yourself plenty of time.

If there are negative items in the report — late payments or defaults — add a note explaining the circumstances behind the troubles.

Why is this important? Your credit history will determine the interest rate on your new car loan.

2. Shop Around

Just like you will shop around for your new car, shop around for your new car loan. Again, will help here, putting the power of the Internet at your fingertips to get several quotes on getting a car loan. From the comfort of your home you can compare the quotes to decide which one is the best for you.

You also may want to consider the financial institution where you do most of your banking when getting a car loan. They know you and your payment history, so they may be able to give you a competitive rate.
Another popular method of getting a car loan is to get one from the dealership where you buy your new car. This will probably cost you more than if you got one from one of the lenders at Dealerships often bump up the interest rate they offer to boost their profit margins. It’s legal, but not in your best interests.

3. Read the fine print

In all the excitement surrounding a new car purchase, the last thing you want to do is sit down and read the fine — and we mean tiny — print in the contract for getting a car loan. But it’s imperative that you not only read the fine print, you understand it.

This is where you will find out about changes to the interest rate if you are late on a payment. This will tell you what happens if you default on the loan. It also will tell you if there are any pre-payment penalties if you want to pay off your car loan faster than the agreed-upon term.

4. Forget the extras

If you are getting a car loan at a dealership, beware of all the deals you will hear about in the finance office. While waiting for the paperwork to be completed, the dealership’s finance people may try to convince you to add on extended warranties, maintenance contracts or other extras. Don’t fall for this, as it will boost the amount of your loan, which means you will be paying more in interest.

5. First Time Buyers Programs

For first time buyers, the rules are essentially the same. But in getting a car loan, you may benefit from first time car buyers programs from auto manufacturers or dealerships that offer a lower interest rate or longer term, which will give you lower monthly payments.

The lender also may relax some of the usual requirements, such as length of employment or a certain credit score, as first-time buyers haven’t had a chance to build a stable employment history or credit history.