Step 1: Know your budget and credit before you shop

The CFPB suggests answering four questions before you shop: how much you can afford, how your credit will affect your interest rate, whether you want or need a co-signer, and how much your trade-in is worth.

Budget for the whole cost, not only the price on the windshield. Up-front costs that add to the loan include the price of the vehicle, optional add-ons, taxes, title and other non-negotiable fees, and dealer document, prep or other fees. A down payment and a trade-in reduce how much you need to borrow. Then add the ongoing costs of owning the car, such as insurance, gas, maintenance and repairs, to a monthly spending plan.

• Check your credit reports. Your credit reports and scores are among the most important factors in the rate a lender offers; in general, the lower the score, the more likely a higher rate. You are entitled to free reports every 12 months from Equifax, Experian and TransUnion. Dispute any errors before you shop.
• Decide on a co-signer. With limited or poor credit history, a co-signer with good credit could lower your rate, but they become obligated to repay if you cannot. In general, a lender cannot require a co-signer unless you apply for joint credit.
• Price your trade-in. Research its value with third-party sites such as Consumer Reports, Edmunds, Kelley Blue Book and NADA Guides, then compare trading it in with selling it yourself.

From the CFPB's What should I know before I shop for a car or auto loan? and How much can I afford to borrow for a car or auto loan?, read October 28, 2026.

Step 2: Compare the ways to get a used car loan

The most common ways to get an auto loan are through the dealer or directly through a bank or credit union. You do not have to use the bank or credit union you already belong to.

From the CFPB's What are the different ways to buy or finance a car or vehicle? and Can I negotiate a car loan interest rate with the dealer?, read October 28, 2026.

Shopping for rates has a limited effect on your credit: credit inquiries within 14 to 45 days of each other count as one. Online comparison sites can help you research rates, but your information may be sent to prospective lenders.

Step 3: Compare offers by more than the monthly payment

It is common to focus on the monthly payment, but the CFPB says other factors have more effect on what you pay over the life of the loan. Compare every offer on the same four things:

• Amount of the loan (amount financed).
• APR and interest rate. The interest rate is what you pay each year to borrow; the APR adds the lender's fees.
• Length of the loan. A longer term lowers the monthly payment but means more interest over the life of the loan, and a longer period of possibly owing more than the car is worth. Some financial experts recommend five years or less.
• Monthly payment.

Most auto loans are fixed rate, so the rate does not change. Variable-rate auto loans are uncommon; the CFPB warns that a low introductory variable rate can end up much higher than a fixed rate. The CFPB's Auto Loan Shopping Sheet helps you line offers up side by side.

From the CFPB's How do I compare auto loan offers? and Can I negotiate a car loan interest rate with the dealer?, read October 28, 2026.

Step 4: Know what you can negotiate

Along with the price of the vehicle, the CFPB lists these as negotiable:

• The interest rate and APR. A preapproval from a bank or credit union is something to show the dealer or other lenders.
• The length of the loan.
• A prepayment penalty. Ask whether the loan has one; if it does, you can negotiate to have it removed.
• Optional add-ons. Service contracts, GAP insurance, credit insurance and products such as window tinting or tire and wheel protection are optional, and their prices are negotiable. Adding them to the loan raises the payment and the amount you borrow.
• Your trade-in value. If you still owe on it, rolling the old balance into the new loan adds to its cost.
• Dealer fees such as preparation, origination, document and delivery fees.

What you cannot negotiate: taxes, title and registration fees set by your state and local government. A larger down payment means you borrow less and may lower your rate. Every lender requires insurance; if you do not carry it, a lender may buy more expensive "force-placed" insurance.

From the CFPB's What things can I negotiate when shopping for a car or auto loan?, read October 28, 2026.

Before you sign: check the paperwork

The federal Truth in Lending Act (TILA) requires the lender to give you written disclosures with the loan terms filled out before you sign. You can ask for them earlier, and take them home to compare. They must show:

• Annual Percentage Rate (APR): the yearly cost of borrowing, interest plus fees.
• Finance Charge: the total interest and certain fees over the life of the loan if you make every payment on time.
• Amount Financed: the amount you are borrowing.
• Total of Payments: the sum of all your payments by the end of the loan.
• Total Sale Price: the total cost of the purchase on credit, counting your down payment.

Make sure every blank is filled in, you and the dealer have both signed, and you have copies of everything; decline to sign a blank or partly filled-in form. After the sale, watch for your lender's first message with where and when to send payments, and pay on time to avoid late fees, possible repossession and harm to your credit. The Equal Credit Opportunity Act makes it illegal for lenders to consider factors such as race, color, religion, sex or marital status in deciding whether to lend to you or on what terms.

From the CFPB's What should I know before I finalize a car or auto loan? and What are the different ways to buy or finance a car or vehicle?, read October 28, 2026.

Financing a used car at Elgin Auto Sales

We work with a number of lenders, and our financing experts can walk you through the used car loan terms that fit your credit and budget. If you already have a preapproval from a bank or credit union, bring it so you can compare offers side by side, as the CFPB suggests. You can start with our online finance application, and value your trade before you visit.

Elgin Auto Sales & Service Center is at 1200 E. Chicago St. in Elgin. Sales is open Monday to Friday 9 a.m. to 7 p.m. and Saturday 9 a.m. to 6 p.m.; our service department, which works on all makes, is open Monday to Friday 8 a.m. to 5 p.m. and Saturday 8 a.m. to 4 p.m. Both are closed Sunday. Get directions.

Shop used inventory, visit our finance center, or contact us with questions.