It is hard to buy a car straight out of pocket nowadays.  Often the only way to do so is to drain your savings, so most people choose to lease a car, finance it through a bank or the dealership, or take out a loan.

One of the most important aspects of taking out any kind of loan is figuring how much money you have to put into the down payment.  The more money you can put in the easier it will be to get a loan with a reasonable interest rate.  The “no money down” offers can seem tempting.  You should avoid these, however.  They often contain loop holes you are unaware of until you get a bill double what you were expecting in the mail. 

Also, if you can afford the monthly payments it is better to pay off your car loan in large chunks instead of small ones over time.  Though it may seem like you are saving money by not spending it all immediately, the interest at the end of the loan could have as much as doubled during the duration of your loan. 

There are several places you can get a car loan from.  Investigate the offers your bank makes, the offers of the dealership itself and also your local credit union.  The most important aspect to compare is what the different interest rates are.  How much money will you end up having to pay on top of the money you have to pay back?

You should also consider the car you have currently, are you able to resell it? If so, can you make enough money off of it to create a reasonable down payment? That is definitely something to consider.  Even selling a crap car for scrap metal can generate some cash for a small down payment. 

If you need to hold off a few months in order to have enough money to create a larger down payment, wait.  Having a larger down payment will make your loan better overall.  It is a good idea to hold off until you are able to put down enough money to avoid high interest rates. 

It is possible you will not qualify for the first loan you try to obtain.  If this happens, do not worry. Wait for a few months; improve your credit rating.  Try to save up some money to help increase your down payment.  Rather than jumping into a less than satisfactory loan wait until you qualify for the loan you want.  Though the need for a new car can seem pressing at the time it is better to wait until you have a loan that is good for an extended period of time. 

Rushing into a loan that will end up sticking you with high interest rates can derail you for a longer period of time then having to deal with a less than optimal car for a few months.