Buying a new – or just new to you – vehicle can be a stressful experience. While dreaming about driving your new car or picking out your favorite make and model is fun, negotiating the final purchase price and analyzing your financing options is not nearly as enjoyable.

According to, the average interest rate on a 60-month auto loan varies from 3.60 to 15.24 percent depending on an applicant’s credit score. That’s a big range and makes shopping around for the best auto loan worthwhile.

Here are some tips to help you ask the right questions and choose the best loan for your new ride.

Do your research. Know­ing the fair market value of the car you’re interested in will help you negotiate and may help you avoid paying more than a vehicle is worth. This can be especially helpful for used cars or if you’re shopping at a Buy Here/Pay Here or no credit check dealer. Online resources like Kelley Blue Book ( and True are a good place to start.

Get pre-approved. Having your financing lined up before you walk into the dealership can take a load off your mind and shorten your purchase experience significantly. Stop by your local financial institution before you visit the dealer to see how much you qualify for and what your interest rate would be, which will impact your total loan costs and monthly payments.

Consider the total cost of the loan. Understanding the complete picture is vital to ensure you’re getting the best deal on your auto financing and you are getting a loan you can afford. Don’t just focus on your monthly payments – consider the term or length of the loan, interest rate, any fees and the total price of the vehicle plus any add-ons like extended warranties. It’s easy to decrease a monthly payment by adding an extra year or two onto the loan term but that might not always be in your best interest.

Protect your investment.You also might want to consider Guaranteed Asset Protection insurance, which covers the gap if your insurance doesn’t fully cover what you owe on the loan and you’re in an accident that totals your car. This might be available from your local bank or credit union lender, just like extended warranties and other options, so be sure to shop around for these items as well.

By being an educated consumer, you can start improving your financial life right away. There are free tools available to you online to help you prepare for big purchases, see how refinancing a higher-rate loan may benefit you and better understand your financing options. Shopping for the loan – not just the car – can pay off in the long-run through potentially lower interest rates, a shorter term or less expensive options like extended warranties or GAP insurance.

Make sure you take the time to research and consider your local community lenders before walking into the dealership. If convenience and saving time is your top priority, you might even be able to ask for financing through your preferred financial institution right at the dealership. Many local dealers work with lenders in the community so be sure to ask for dealer direct financing through your credit union or bank.

Enjoy that new ride and here’s to helping more hard-­working Kentucky families improve their financial health this fall.

Eldon Tilley is vice president of marketing for Fort Knox Federal Credit Union.