The first steps toward financing your next vehicle

When purchasing a new car, many buyers decide to finance rather than buying the car outright. Financing allows drivers the opportunity to drive a new car after making an initial down payment and then making monthly payments until the loan has been paid in full.

Without the option to finance, many drivers may not be able to afford a brand new car or even a preowned car with relatively few miles that's more reliable than an older used car with a considerable amount of miles. But before prospective buyers visit the financing departments of any dealerships, it's best to first take some steps to ensure they get the best financing deal possible.

· Address your credit score. Your credit score will go a long way toward determining both your eligibility to finance a car as well as the interest rate on the loan should you be approved. Get a copy of your credit report

from a credit reporting agency and scour it to determine if there are any discrepancies or blemishes that need to be addressed. If your credit score is low, try to delay buying a new car until you can take steps to improve your score. Such steps may include paying down existing debt, establishing a history of paying on time and making certain that any inaccuracies are removed.

· Determine how much you can afford. It might be your dream to tool around town in an imported sports car, but if you need to finance your next car, chances are the high-end imports or luxury automobiles are more than you can afford. The greater the down payment you make, the less your monthly payment will be. So if you have a substantial amount of money in your savings, you may want to put more down at signing so your budget is more flexible month-to-month. Calculate the cost of all of your monthly expenses to determine how much you can afford to pay for a car each month. And don't forget that insurance costs on a brand new vehicle will be more than the costs of insuring a preowned car or truck.

· Seek preapproval for a loan. Much like you might get preapproved for a mortgage, you can do the same with regard to an automotive loan. Walking into a dealership preapproved for a loan can make the process less of a hassle, and it also might compel a dealer to make a more attractive offer than the lender who preapproved you.

· Don't pressure yourself. Many buyers are their own worst enemies when it comes to buying a new car. If you were preapproved for an auto loan, you might feel like you need to go out and buy a new car immediately. While a preapproval may mandate that you buy a car within a certain amount of days before you have to reapply, that still gives you a considerable amount of time to find a car. If you pressure yourself to buy a new car, you may end up driving the wrong vehicle or paying too much. Be patient when shopping for the best deal, and you're more likely to find it.

Financing is a great way to get behind the wheel of your next vehicle. Some careful planning before visiting the dealership can make a financing deal even better.