Watch Out For These Car Finance Offers

Looking for a new car? Luckily for you, it's a buyer's market out there. Thanks to bankrupt automakers looking to get rid of extra inventory as soon as possible, now has never been a better time to go shopping for that dream car, especially if you'll be using car credit to purchase it.

Like with most special deals, some of them are truly too good to be true! Here are the most frequent offers that dealers are using to entice customers in, and why you should run away from them:

Buy One Car, Get The Second Car Free. This sounds like the ultimate deal: purchase one vehicle, and you'll get a second one free courtesy of your car dealer! Sure, this might sound like an incredible deal at first, especially if you have a big family that could use the second car; but be forewarned before you sign that contract. Dealers won't let you pick the second car of your choice, and will instead require you to take a large SUV or another vehicle that doesn't sell well. Additionally, that second car is by no means free: dealers will tack on hidden fees and costs to ensure that they get some return on the car. If you're purchasing that first car with the dealership's car credit, you'll be hit with a high-interest loan that will really stretch your monthly budget.

Car Credit At Low-Interest Rates. Dealers are starting to get desperate – and many of them are offering car credit loans at rock-bottom interest rates. Does this offer intrigue you? Before you head out to your local dealership, be warned: you'll need a perfect credit score in order to be approved for this offer. Besides, these attractive loans are often only available with only certain vehicle models, which means that your dream car might not be covered by this deal. To get the best deal on your car credit, apply for competitive loans from your bank or lender before approaching the dealer for financing. This way, you can ensure that you're getting the best loan rate for your credit score.

Purchase A Car Today. Many dealers are promising customers that their car credit loans will be approved on the spot, meaning that they can drive away with a car that day. Yet if you take a closer look at the fine print, you'll see that the terms of the loans are subject to change – and you might see your interest rates skyrocket just a few days later.

To avoid this trap, be sure to get a competitive loan offer from another bank or lender before you approach your dealer for more financing options. Don't forget: never let the dealer know that you don't intend to leave unless you have your new car. You want to have the power in all negotiations!