The Chicago Auto Show opens to the public tomorrow, and if you’re in the market, there’s a lot of nice-looking cars to tempt you. But you don’t want to overpay for that new car.

Whether you’re buying a new car or one that’s been gently used, you’ll want to make sure you know what kind of financing is available ahead of time. And the place to start your search for great rates is the internet.

They’re sleek and shiny, they’re loaded with DVDs, GPS satellite equipment and other techno-goodies and they’re going to cost a small fortune. The average new car price for 2005 is over $28,000, which means it won’t take much for your new car loan payment to exceed your utility and grocery bills combined. What you can to keep your monthly payment under control? Start by asking your lender some key questions.

What’s the annual percentage rate for the loan? The APR is the rate you’ll pay with all the fees added in. Does the loan contain any penalties if you pay off the loan early? You’ll want to make sure your loan is penalty-free. Finally, be sure to calculate whether your best deal is going to be a zero percent loan or the rebate package the dealer is offering.

And don’t forget to shop around before you commit to any dealer, credit union or online lender. If you’ve got great credit, you should be able to land a car loan at 4 percent or less. If you qualify for an interest rate of 5 percent or lower, taking the rebate may be a much better deal over the long haul. Finally, if you decide to finance your new car with the dealer, be sure you negotiate a great price for the car you want before you start talking trade in or loan terms.

Many consumers don’t realize that super-low interest rates are also available for those who purchase used cars.

What’s it worth? Here are some websites to check out that can help you figure out how much to pay for your car:

Kelly Blue Book
Nada guides
Federal Citizens Information Center
How to buy and finance a new car

Ready to finance your new or used car?

Be sure to check online first and then figure out what your dealer, banker or local credit union can offer.

Published: Feb. 10, 2005