Auto loan tips and advice

Don't fall for the low APR rates you see from manufacturers. They generally require a credit score more than 700 and are generally only available
for 36-month terms; R.L. Polk says these sorts of loans make
up only 7 percent of the total auto loan market.

Your debt to income ratio should be less than 30 percent when
applying for a loan. Experts say you should have your credit
balances at less than 50 percent of your credit limit.

If you're a new college grad, try to not apply for an auto loan until you've
been in your job for six months.

Many experts suggest never buying a vehicle unless you can pay 20 percent down. The idea is to not get caught in a situation where you owe more on a car than it's worth (being "upside down" as they call it in the business). Jeff Ostroff of Car Buying Tips takes this a step further, and says you should never finance a car for longer than 48 months.

Remember the difference between interest rate and annual percentage rate (APR). The APR includes all the fees and the compounded interest and will always be higher than the interest rate by itself.