Financing a car lets you pay over a set period, spreading your obligation out over months and years. Whether buying an SUV or a sports car, financing allows buyers to make a significant purchase affordable by breaking it up into smaller payments, taking the immediate hit off their bank account.

But financing a car isn't as simple as borrowing a set amount of money and paying back the exact sum. Lenders have to make money when they dole out loans, so they charge interest and fees over the loan term. 

The borrower's credit report mainly determines the interest rate and term length of a car loan. A credit history report gives lenders a clear picture of someone's financial past and how likely they are to pay the loan back in full. 

Good credit scores equal more favorable loan conditions, like lower interest rates, and bad credit scores go along with less advantageous ones, like higher interest rates.

Obtaining financing can be a complicated task, and there are different ways, listed below, to help you through the process.

With the rush of excitement during a vehicle purchase, it’s understandable to be in a hurry to sign the papers and get out on the road. It's certainly understandable when you've got a bright, shiny vehicle waiting, and you can't wait to take a drive.

But if you wait to look into auto financing options before buying, you may limit your options for scoring the best loan conditions. 

However, when you perform your research ahead of time and find out what rates and terms you're eligible for, not only can you score a better deal, you can concentrate on car shopping.

Pre-approval on a car loan involves applying to a lender for a set amount of money, and in return, receiving an offer with the terms for which you qualify. Obtaining pre-approval for a car loan benefits you in several ways. 

First, you'll learn your credit score and get an idea of the types of loans for which you're eligible. Armed with this information, you can then shop around with different lenders to find the right one for you. 

Next, applying for pre-approval helps you stay within a budget. Feelings can run high during car buying, and maybe you'll be tempted to spend more than you can afford. But being pre-approved for a set amount of money allows you to keep your financial decisions in check and purchase something within your means. 

And when you visit a seller with a pre-approved loan in hand, they'll know you're serious about buying and not just there to browse and take a test drive. 

Financing your next car purchase is a complex process that takes a lot of your essential time. Wouldn't it make things easier if someone took care of the details for you? When you buy from Shift, they work with a network of trusted lenders, finding you the best deal on financing.

The terms of an auto loan, namely the interest rate and length, are essential to pay attention to as you go through the process of securing financing.

You'll want to check with different lenders and find out which ones offer you the lowest interest rate. The interest rate is a percentage of the principal amount you borrow and is a portion of each monthly payment. The interest rate can either save or cost you hundreds and even thousands of dollars on a car loan, so it's a good idea to look around. 

Both short-term and long-term car loans have advantages and disadvantages, so it depends on your preference.

On a short-term car loan, say 48 months or less, you'll pay less interest, keeping the total transaction price to a minimum. However, your payments will be higher than a loan that lasts months or years longer.

But if you know just the car you want and need more time to pay, a longer-term loan, like 60 months or more, lowers your payments each month. However, you also owe additional interest with each extra month of payments, increasing the total cost.

Determining the loan conditions that are right for you comes down to your budget and preferences and how they fit into your financial picture.

Making a down payment on a car loan not only decreases your monthly payments, but it could secure you better terms, too. Though some experts recommend putting 20 percent down, any amount is still good and demonstrates your financial stability to lenders. 

A down payment also guards you against being upside down on a car loan. Sometimes, a car depreciates to a value less than the total you still owe on a loan. This condition, also known as being upside down, is financially precarious and best avoided.

When you're trying to be financially prudent, a good practice is keeping your car payment at around 10-15 percent of your monthly income.

With new vehicles depreciating an average of 20 percent within the first year of ownership, the used market is full of excellent choices that save you money. 

And with vehicle build quality and technology at their highest levels ever, buying a used car instead of a new car doesn't come with the pitfalls of yesteryear, like reliability or maintenance concerns.

Shift has a wide selection of quality used vehicles located across the country on its easy-to-use website. And when you go with Shift, you get the reassurance of 150-point inspections and free Carfax reports for the ultimate in transparency.

Financing a car lets you get behind the wheel of the vehicle you want and pay for your purchase gradually over time. But car loans aren't simple, and you need to pay attention to the details if you're going to get the best deal.

Practices like pre-approval, researching the best terms, and even buying used give you options to save money and still get an excellent vehicle.

When you set out on your quest to buy your next car, having financing out of the way ahead of time allows you to concentrate on your search rather than last-minute loan applications. 

Maybe you need an SUV to tow your camper, but you're unsure if you should buy used. For extra reassurance, any vehicle you buy from Shift has a seven-day refund policy. In case you aren't fully satisfied with your purchase, you're able to return it with no questions asked.