Not everyone is appreciative of getting loans to do important things—it is like signing a contract to tie yourself down with more debt. Still, in many situations, you will find that you cannot do without a loan or borrow some amount of money to achieve your set goals. We live in a “debt-rich” society where every need and desire can be met by qualifying for a loan.

Debt doesn’t have to be bad, especially if you can keep your debt-to-income ratio very low. One has to be smart in taking out loans, especially in such ventures as buying a car. A car depreciates and loses value very quickly, so it is rather unwise to roll out your debt on your former car purchase to the new one and drum up a higher interest.

Many people need cars to smooth their daily activities; so, is it cool to get a car loan to finance a vehicle? Yes, it is, but there is a vast difference between using the loan wisely and using it to buy many cars you cannot afford. There are many online loan scammers to avoid when applying for a loan. Check out some tips to help you buy a car without paying more than you have to;

  • Get preapproved for a loan before you visit the dealer

It is best to get preapproved for a loan from your bank, a credit union, or an online lender before visiting the dealership. It makes you ask yourself the compelling question of how much car you can afford. You may find some other vehicles that you fall in love with at the dealership, but with the amount of money covered by the loan, you will be able to rationalise effectively.

  • Make sure to keep things simple

Focus on one thing at a time, and do not reveal all your cards to the salespersons. First, settle on the car’s price, then you may talk about any trade-ins if you have one. The salespersons will want to know if you plan to get a loan through the dealership or plan to trade in another car. Trying to deal with these questions make things complicated, so take a step at a time.

  • Never buy add-ons at the dealership

The dealers are hoping to make a good deal, so even after you have gotten the car, you will be given many other offers. They will try to sell you extended warranties, paint and tire protection plans, and they make a lot of money from this venture. Never fall for this trade trick and go on to buy add-ons.

  • Beware of longer-term car loans

A car loan that is longer than six years implies lower monthly payments but a higher interest rate. Most people do not realise the danger of getting loans like this and burying themselves in a lot of debt.

A used car will help you save more—the rule is to ensure that all of your car expenses should not be more than 20% of your take-home pay. Therefore, be smart in taking out a car loan.