To maneuver around this issue, consumers should get pre-approved for a loan by a credit union or bank before heading to the dealership, says Ronald Montoya, Edmunds.com's consumer advice editor. That way, you'll walk in knowing what you qualify for and can see if the dealer will beat the price.
"The four-square." When you sit down with the dealer to calculate the costs, he or she may pull out a sheet of paper divided into fourths: one corner for the trade-in price for your car, one for the purchase price of the new car, one for the down payment, and the last for the monthly payment. From there, the salesperson begins crunching numbers—most likely making it too hard for you to follow.
[See 50 Smart Money Moves]
Throughout the process, the salesperson tries to draw your attention to the monthly payment. If you're focused on that payment, you may get locked into a higher interest rate. "Don't lose sight of the other, more important aspects of the deal by fixating on the monthly payment," says Montoya, adding it's easy to lose track of the final cost.
The bottom line: Arrive at the dealership armed with knowledge so you can hit the road knowing you've snagged a great offer.