If you’re in the market for a new car, know that you can get a loan from a car dealer – and get a good rate at that. All it takes is a bit of planning and a knowledge of what you want and what the dealer has to offer. Remember that if you’re willing and able to carry the terms of a loan, you’re in the driver’s seat, especially in these tough economic times.

But before you even talk to the dealer, there are a few questions you need to ask yourself that will help you in your negotiations. First, you have decide on the car model you’ll be buying – including features like air conditioning, AWD, a CD player or more – and know the manufacturer’s suggested list price for each of these additions. Fortunately, you can do this on the web now, although any reputable dealer will be more than happy to sit down with you to discuss this, especially since it expedites the buying process.

You also need to decide how long a loan term you’re willing and able to commit to. Contact the bank or credit union that will be underwriting the loan and see what they offer in terms of loan terms and interest rates, given the amount of money you’ll be financing and the car you’ll be buying. Fill out the application papers at your credit union or bank and see if your credit rating is sufficient to allow you to qualify for their rates. Be sure to also check on any fees that you’d have to pay as part of the deal.

Now it’s time to go to the dealer. While at the dealership, give the dealer a description of the car and any additions that were part of the estimate that the bank or credit union got. Ask for the same interest rate on the amount of money that the bank offered you. Here’s where the fun begins. Ask the dealer to make a counter offer that will be lower than what the bank or credit union offered you. This will generally happen because the dealer wants to sell the car – especially now when inventories are so inflated.

Next, ask for the bottom line, which is the total of the interest and principal – the total amount you’ll pay over the life of the loan. This is where your dealer may be able to negotiate something better than the bank. Finally, check to see if there are any prepayment penalties if the loan is paid off early; obviously you don’t want to have any, as these will negate the benefits of all the negotiating you just did.

So, in a nutshell, what you’re going to do is get the best offer you can from a bank or credit union and use that as your bargaining tool with the dealer. When a dealer sees you’re approved for a loan, they know you want to buy. Of course, they want you to buy from them, as opposed to some other dealer, so they’ll do what they can to entice you to spend your money with them. If the dealer won’t offer you a better deal than the bank, walk away – there are plenty of other dealers out there who will be more than happy to make you a customer.