Dear EchoBay Expert:

Dear Loyal Reader: It is easy to be overwhelmed when you are sitting in the finance manager's office at the dealership. But, as long as you are prepared, you can come out unscathed.

First, be sure to check your credit report before you go to the dealership. Inaccuracies on your report can cause the dealer to charge you a much higher interest rate on your auto loan.

Second, be sure to discuss trading your old car and buying the new car as two completely different transactions. If you make a deal based on the two cars together, it is very easy for the dealer to underpay you for your old car or overcharge you for your new car.

Third, the dealer makes a great deal of profit when they close your auto loan by adding junk fees. These could include prep fees, sales promotion fees and extended warranties. You should be able to negotiate these fees out of your loan.

Fourth, know what the value of the car is that you are purchasing. You should know the MSRP (Manufacturer's Suggested Retail Price), the invoice price, and any rebates or incentives that are being offered. Several websites offer this information including autoweb.com, car.com, autobytel.com, and carsdirect.com.

Finally, be sure that your auto loan does not contain any penalties such as a prepayment penalty. This penalty can add up to quite a fee and it applies even if you just pay a little extra on your car loan each month. Ask that it be removed if this penalty appears.

Dear EchoBay Expert:

Dear Loyal Reader: Yes, it's definitely to your advantage to arrange your financing prior to going to your dealer to buy your new Silverado. It'll give you more negotiating power since the car salesman will know you're serious about buying a car and he or she will be viewing you as a cash buyer. You'll be walking into the dealership with a set amount to spend, and if the dealer isn't willing to negotiate down to that amount, he'll lose a sale.

Since sales people make their livings by making sales and not losing them, he or she will be working hard to give you the price that your loan amount will cover, creating a great negotiating tool for you. You'll also get to avoid the game of "let's hide the charges." When consumers arrange financing through dealerships, the dealers often hide costs within the interest rates.

When you arrange your financing with an online car loan or through your credit union, you don't have to hassle with the hidden profits. It also nips the "we're the only one's who will finance you" line right in the bud. Oftentimes dealers will try to justify a higher interest rate with the excuse that you can't obtain financing elsewhere.

If your financing is already arranged, it eliminates this opportunity. When you go to the dealership with your check in hand, it makes you a lot less vulnerable to these less-than-ethical tactics and makes you a much more empowered consumer.