Testing and choosing a new car can be a lot of fun, but financing one generally isn't. Auto loans can be tricky to choose and a bad one could have you paying much more than the car is worth. There are a few things to watch out for when looking to get a new car loan.

Step1Talk total price with the salesperson and not monthly payment goals. Many car salespeople will try to get you to agree to a longer loan to keep your payments down. You'll just end up paying more in interest, so keep your eyes on the total price of the car.

Step2Get a copy of your credit report before you go to the bank to ask for a loan. Get a free copy of your report from AnnualCreditReport.com (see Resources below). Know what is on your report before a potential lender looks at it.

Step3Shop around for good interest rates on your loan. Your bank or credit union might be the best places to look at first, but don't jump on a loan until you get a few different estimates. If you have bad credit, you'll probably have to look around extensively to get the best new car loan.

Step4Keep your loan lifetime low. Some people like to get longer loans in order to get lower monthly payments on expensive cars, but these loans can get you into trouble if you decide to trade the car in before it's paid off.

Step5Ask about any fees related to your new car loan before you sign up for it. Some banks charge a small fee, but others add a small percent to your interest rate. Be sure the bank fees won't make your loan unaffordable. Step6Recalculate your entire monthly budget and include your new car loan. If the loan fits with your other expenses then complete the paperwork with your creditor to finalize it.

Tips & Warnings

• The dealers closest to you might not have the best price, look at dealerships that are a few towns away.
• Extra accessories like airbags and anti-lock breaks might increase your price, but they can also help you save on insurance.
• If you like to buy a new car every few years, then it may be cheaper for your to lease your vehicle instead of buying it new.
• Never tell a car salesperson your budget right away. Always try to haggle for the best price.
• Be sure that your new car loan stays at a set interest rate and doesn't increase after the first few years.