Buying a car, whether new or used, can be a stressful and challenging experience. Many people are reluctant to negotiate auto deals for fear that they won't get the best terms.

One of the ways that you can protect your financial interests is to learn as much as possible about the process of financing a vehicle. It also helps to walk into a dealership with a pre-approval for a loan. If you're ready to buy your next vehicle, here is what you need to know about financing a car.

Determine your budget.

Before you purchase or shop for a vehicle, it's helpful to sit down and thoroughly assess your budget. Figure out what you can comfortably afford to pay each month for a car payment. From this, you can figure out how much car you can afford, or a lender will be happy to help with this calculation.

Get approved for an auto loan.

You will have much more leverage in purchasing a car if you are pre-approved for financing before you shop.

When you take out an auto loan, you will make payments on that loan over an agreed period until the loan, plus interest, is satisfied. The lender will hold a lien on your vehicle until you pay your loan in full.

Understand the Terms of your loan.

When you get an auto loan, ask the lender to explain the details so that you understand your obligations and the implications of your choices. The "term" is the length of time that you have to pay back the loan.

While a longer term (61-72 months) will give you a lower monthly payment, it also comes with a higher APR. The APR is the annual percentage rate on the loan. The shorter your term and the higher your credit score, the lower your APR.

Make a Down payment on the car.

You may be required to make a down payment on the next vehicle you purchase. Since new cars immediately depreciate in value (as much as 40% in the first three years), this down payment helps protect the lender from that offset.

When you pay more for the car upfront, your monthly payment will be less. In some cases, any trade-in value will count as a down payment. What a lender requires, if anything, could vary depending on your credit score.

Finance a New or Used Car with City Bank

If you are looking to buy a new or used vehicle, or would simply like more favorable terms on your current vehicle loan, City Bank has a wide range of auto loans that can help. We are committed to offering our customers the best auto loan to suit their needs at competitive rates.

Learn more about our auto loan program or apply now for pre-approval online, at one of our locations, or by calling 1-800-OUR-BANK.