I think one of the biggest and yet most common mistakes that is made by auto shoppers today, and especially those with poor and bad credit, is to not get preapproved for their financing before they start seriously looking for a car. I say this for a number of reasons.

First of all, if you have poor credit and go thru all the hassle of selecting, negotiating the price and finally get to the point of going to the finance office in the dealership without knowing where you stand on financing, well, let me tell you, you’ve wasted a lot of time. The finance manager, who is usually the very best salesman in the dealership, will totally cut you a new one. You can lose everything in a flash that you thought you had earned in your hard fought negotiation. For most of us, not trained in finance, we don’t even understand what’s happening to us. We are being taken to the cleaners without even recognizing it. Just minor adjustments to a long term auto financing contract can make large differences in the amount of money you pay for your car over the life of the loan.

Secondly, it’s very easy to be not as tough as you can be in your bargaining when you don’t have great credit and don’t want to offend the dealership since you realize that is probably where you are going to have to turn for your financing as well. You try and walk the line. This may mean you don’t do nearly as good a job at negotiating on your car purchase as you could or should. One way to describe this is it’s the worst of all worlds.

Thirdly, if you don’t understand your financing situation, it’s almost impossible to even begin to know what makes and models you should be looking at. If you don’t know how your costs are going to play out, you really don’t have any idea of what you should be looking at.

This may be a long way of saying that the smart way to go look for a car is to wrap up your financing even before you head to a dealer showroom. You ask, how do you do this? Well, it’s easier than you think. It can all easily start on the internet where you will find literally scores of lenders and dealers who are ready to work with you and help you get you’re financing in order before you begin your car search. So take a few minutes and get your financing worked out on the internet before you start the process of car shopping.